Which of the Following Is Occurring When an Economy Is

question 123

Multiple Choice

Which of the following is occurring when an economy is experiencing sustained growth in real GDP?

• A)actual GDP is greater than potential GDP
• B)actual GDP is less than potential GDP
• C)potential GDP is likely to be increasing
• D)factor prices are likely to be decreasing
• E)wage rates will decrease slowly as factor-utilization rates decrease

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Definitions:

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash flow from operating activities.

Depreciation Expense

The allocated portion of the cost of a tangible fixed asset written off each year, reflecting its usage and wear and tear.

Patent Amortization

The gradual expensing of the cost of a patent (an intangible asset) over its useful life.

Quality Of Income Ratio

A metric assessing the proportion of income that has been realized or converted into cash, providing insight into the company's cash flow quality.