Which Statement About Contingent Liabilities Is Correct

question 7

Multiple Choice

Which statement about contingent liabilities is correct?

• A)It is a present obligation that will probably result in the economic outflow of resources.
• B)It involves uncertainty about either the timing of payment or the amount of payment.
• C)It is an obligation that arises from past transactions and events and can be reliably measured.
• D)It is a present obligation that arises from past events but it cannot be reliably measured.

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Definitions:

Labor Force

Comprises all the working-age population that is employed and those unemployed but seeking employment.

Rational Expectations

The economic theory that assumes individuals make predictions about the future based on all available information and in a way that is systematically correct.

Policy Makers

Individuals or groups responsible for making decisions and establishing regulations that guide the operation of governments and organizations.

Inflationary Expectations

The beliefs that consumers, businesses, and investors have about future inflation rates, which can influence economic behavior and policy decisions.