Suppose That the Economy Is in Equilibrium with a Trade

question 95

Multiple Choice

Suppose that the economy is in equilibrium with a trade deficit and that saving is greater than investment.According to the circular flow model,the government's budget

• A)must be in deficit
• B)must be in surplus
• C)must be balanced
• D)could be in a surplus or a deficit
• E)could be in balance or a deficit

Identify the role of preference decisions in the context of capital budgeting.

Comprehend that shorter payback periods do not necessarily indicate higher profitability.

Grasp the significance of aligning the discount rate with the company's minimum required rate of return in net present value analysis.

Recognize the importance of considering salvage values in the computation of payback periods.

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Definitions:

Enforcement of Promise

The act of ensuring that a promise, especially one formalized in a contract, is fulfilled according to its terms.

Alaska Supreme Court

The highest court in the state of Alaska, responsible for reviewing decisions made by lower state courts.

Promissory Estoppel

A legal principle that prevents a promisor from arguing that an underlying promise should not be legally upheld or enforced, due to the promisee's reliance on that promise.

Written Contract

A legally binding agreement between two or more parties, documented in a written form.