The Table Given Below Shows the Disposable Income and Consumption

question 142

Multiple Choice

The table given below shows the disposable income and consumption of a household.In the table below,saving:
Table 9.1
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$\begin{array}{cc}\text { Disposable }\\\text { Income }(\$) & \text { Consumption }(\$) \\\hline 1,000 & 800 \\1,100 & 880 \\1,200 & 960 \\1,300 & 1,040 \\1,400 & 1,120\end{array}$

• A)decreases as disposable income increases.
• B)decreases as disposable income decreases.
• C)remains constant as disposable income increases.
• D)is negative at a disposable income of $1,000.
• E)is negative at a disposable income of $1,400.

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Definitions:

Smoothing

An accounting practice where companies level out peaks and troughs in their financial statements over time to present a more consistent financial performance.

Pension Expense

The total cost incurred by an employer to provide pension benefits to its employees, recognized during the period the employees provide services.

Amortization

The gradual reduction of a debt over a period through regular payments covering interest and principal components.

Deferred Loss

A loss that has been incurred but is not immediately recorded in the financial statements.