Under Which of the Following Circumstances Should an Economic Advisor

question 77

Multiple Choice

Under which of the following circumstances should an economic advisor for a small economy recommend a large increase in government spending? I. The country is in a recession that seems to be turning into a depression. II. The government has a record high budget deficit. III. A lot of infrastructure has been destroyed by a hurricane.

• A) I and II only
• B) I and III only
• C) II only
• D) I, II, and III

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Definitions:

AASB 12/IFRS 12

Disclosures of Interests in Other Entities, a standard that sets the requirements for disclosing information about an entity's interests in subsidiaries, joint arrangements, associates, and unconsolidated structured entities.

Voting Rights

Rights granted to shareholders to vote on company matters, such as electing the board of directors or approving corporate policies.

Significant Judgements

Decisions made by management in the preparation of financial statements that have a significant impact on the amounts and disclosures in those financial statements, often requiring considerable estimates.

Consolidated Financial Statements

Financial statements of a group in which the assets, liabilities, equity, income, expenses, and cash flows of the parent company and its subsidiaries are presented as those of a single economic entity.