FIGURE 23-3 -Refer to Figure 23-3.Which of the Two Economies,A or B,will

question 43

Multiple Choice

FIGURE 23-3
-Refer to Figure 23-3.Which of the two economies,A or B,will experience more volatile fluctuations in national income in response to aggregate demand shocks?

• A)Economies A and B will experience similar volatility because the slopes of the AD curves are the same.
• B)Economy A because the large fluctuations in the price level lead to large fluctuations in national income.
• C)Economy A because the multiplier is much larger than in Economy B.
• D)Economy B because the multiplier is much smaller than in Economy A.
• E)Economy B because output is purely demand determined,and there is no offsetting effect from a price level increase.

Execute journal entries related to petty cash transactions, identifying discrepancies and adjusting accounts appropriately.

Evaluate the need and procedures for maintaining compensating balances with banks.

Diagnose signs of potential internal control problems within an organization.

Understand the differences in financial outcomes between FIFO and LIFO inventory costing methods during periods of increasing costs.

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