Hank Bought a Small Ranch for $300,000 in 2010

question 52

Multiple Choice

Hank bought a small ranch for $300,000 in 2010. In 2014, oil is discovered on neighboring property. The county assessor re-valued Hank's property at $1,550,000. Hank does not recognize any income due to the

• A) All-inclusive Income Concept.
• B) Capital Recovery Concept.
• C) Realization Concept.
• D) Claim of Right Doctrine.
• E) Ability-to-Pay Concept.

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Definitions:

Marginal Propensity

The incremental change in spending (consumption or saving) that occurs with a change in disposable income.

Multiplier

An economic factor that quantifies the impact of a change in investment, government spending, or other financial activity on the overall economy.

Marginal Propensity

Refers to the increase in personal consumer spending that occurs with an increase in disposable income.

Aggregate Expenditure

The total amount spent on goods and services in an economy at a given level of income during a specific period.