Consumption Is an Important Element of Aggregate Demand Because It

question 14

Multiple Choice

Consumption is an important element of aggregate demand because it

• A)is the most volatile component of GDP
• B)accounts for roughly 70 percent of GDP
• C)is very interest sensitive
• D)is greatly affected by stock market activity
• E)all of the above

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Definitions:

Impairment

A decrease in the recoverable value of an asset below its carrying amount on the balance sheet, necessitating an adjustment.

Consolidated Goodwill

The excess of the purchase price over the fair value of the net assets of a subsidiary, recognized on a parent company's balance sheet when consolidating financial statements.

Consideration Transferred

The value exchanged or payment made by an acquiring entity to obtain control of another business in a business combination.

Partial Equity Method

An accounting technique used for investments, where only a portion of the investment's change in net assets is recorded.