Which of the Following Occurs If an Economy Experiences a Recessionary

question 155

Multiple Choice

Which of the following occurs if an economy experiences a recessionary gap?
I. Actual real GDP is less than potential output.
II. Actual real GDP is greater than potential output.
III. Unemployment is less than the natural rate.
IV. Unemployment is greater than the natural rate.

• A) I and III
• B) I and IV
• C) II and III
• D) II and IV

Adjust reported net income for non-cash expenses and gains or losses on sales of assets.

Understand the direct method for reporting cash flows from operating activities.

Calculate the amount of cash received from customers.

Determine the cash payments for income tax, merchandise, and operating expenses.

---

Definitions:

S Corporations

A type of corporation in the United States that allows profits, and some losses, to be passed directly to owners' personal income without being subject to corporate tax rates.