A Key Element of the Classical Growth Theory Is That

question 14

Multiple Choice

A key element of the classical growth theory is that

• A)an increase in population leads to increase in labor supply and a decline in real GDP per person.
• B)market forces drive economic growth.
• C)economic growth can be sustained as long as government intervention does not occur.
• D)low taxes promote economic growth.
• E)increases in technology drive economic growth.

Comprehend the transition and accounting implications from fair-value method to equity method of accounting.

Acquire knowledge on the treatment of permanent loss in value of investments under the equity method.

Gain insights into how dividends and net income of investees affect the investor's financial statements under the equity method.

Learn the treatment of Other Comprehensive Income (OCI) in relation to equity method investments.

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted and actual volume of production, multiplied by the fixed overhead rate, indicating how fixed costs are allocated over different levels of output.

Fixed Overhead Budget Variance

This term refers to the difference between the budgeted fixed overhead costs and the actual fixed overhead costs incurred.

Standard Fixed Manufacturing Overhead Rate

The predetermined rate used to apply fixed manufacturing overhead to products, based on an estimate of total fixed manufacturing costs and an allocation basis.

Actual Fixed Overhead Costs

The real costs incurred for fixed overhead during a specified accounting period.