Refer to Application 2, "Comparing the Severity of Recessions," to Answer

question 17

Multiple Choice

Refer to Application 2, "Comparing the Severity of Recessions," to answer the following questions:
-According to the application, the recession that started in December 2007 is comparable to the recession in:

• A) 1980.
• B) 1981- 1982.
• C) 1990- 1991.
• D) 1973- 1975.

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity in a business.

CCA Class

Capital Cost Allowance Class; categories used in Canadian tax law to determine the depreciation rate for tax purposes on tangible and intangible assets.

Depreciation Expense

An accounting method that allocates the cost of a tangible asset over its useful life to account for the decline in its value over time.

Fixed Assets

Durable physical assets owned and utilized by a company in its operations for the purpose of producing revenue.