If Total Liabilities Increased by ¥35,000 and Equity Increased by ¥10,000

question 231

Multiple Choice

If total liabilities increased by ¥35,000 and equity increased by ¥10,000 during a period of time, then total assets must change by what amount and direction during that same period?

• A) ¥45,000 decrease
• B) ¥45,000 increase
• C) ¥60,000 increase
• D) ¥70,000 increase

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Definitions:

Elastic

A characteristic of a good or service with demand or supply that is sensitive to changes in price, meaning the quantity demanded or supplied changes significantly.

Supply-side Economics

An economic theory that argues economic growth can be most effectively fostered by lowering taxes and decreasing regulation to increase production.

Tax Cuts

Reductions in the amount of taxes imposed by a government, often aimed at stimulating economic growth by increasing disposable income or encouraging investment.

Labor Supplied

The overall time period that workers consent to and can offer to work, in exchange for an established rate of pay.