An Economy Is in the Steady State If

question 63

Multiple Choice

An economy is in the steady state if

• A) investment equals depreciation.
• B) investment equals zero.
• C) net investment equals depreciation.
• D) capital grows at a constant rate.
• E) there are no diminishing returns.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Subsidiary

A company controlled by another company (the parent company) through ownership of more than 50% of its voting stock.

Goodwill

An intangible asset that arises when a buyer acquires an existing business and pays more than the fair value of the identifiable net assets.

Equity Method

This accounting approach is used to assess the contribution of investments in other entities to the investor's financial health, altering the investment's value on the balance sheet based on the investor's share of the entities' net assets.