Operating Activities in a Statement of Cash Flows Are Generally

question 13

Multiple Choice

Operating activities in a Statement of Cash Flows are generally associated with:

• A) changes in equity of an entity.
• B) revenues and expenses of an entity.
• C) acquisitions of non-current assets of an entity.
• D) movements in non-current liabilities of an entity.

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Definitions:

Crowding-out Effect

A situation where increased government spending leads to a reduction in private sector investment.

Multiplier Effect

An economic phenomenon where an increase in spending produces an increase in national income and consumption greater than the initial amount spent.

Aggregate Demand

The aggregate market demand for goods and services in an economic environment, valued at a specific price level within a certain timeframe.

MPC

Marginal Propensity to Consume, which is the proportion of any additional income that a consumer spends on goods and services.