Economies Usually Face Recessions for Long Periods of Time Because

question 19

Multiple Choice

Economies usually face recessions for long periods of time because:

• A)the pessimism in the economy slows down the process of adjustment.
• B)wages and prices are rigid in nature.
• C)firms tend to streamline their operations every year.
• D)governments tend to avoid making tough decisions.
• E)wages fall faster than the price level.

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Definitions:

Adjusting Entries

Adjusting entries are journal entries made at the end of an accounting period to update income and expense accounts and ensure that the financial statements reflect the accrual basis of accounting.

Cash Account

A financial account that records cash transactions, including receipts and payments, showing the cash balance available at any given time.

Adjusting Entries

Accounting entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Accounting Errors

Mistakes made in recording financial transactions or preparing financial statements.