What Is Perhaps the Most Important Economic Reality in the United

question 10

Multiple Choice

What is perhaps the most important economic reality in the United States over the last 50 years?

• A) Real GDP has declined dramatically since the end of World War II.
• B) The middle class has been shrinking.
• C) Virtually all U.S. citizens have become wealthier.
• D) Our economy has shifted to become dominated by intangibles such as services and information.
• E) Our economy is still suffering from the very high inflation rates of the 1970s.

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Definitions:

Sunk Costs

Sunk costs refer to money already spent and permanently lost, which cannot be recovered and should not influence future financial decisions.

Opportunity Costs

A rephrased definition: The potential gains or benefits that are lost when choosing one alternative over another in decision-making.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Income Statement

A financial statement that shows a company’s revenues, expenses, and profits or losses over a specific period.