Recessionary Gap Arises When

question 147

Multiple Choice

Recessionary gap arises when

• A)inventory stock falls.
• B)government spending increases.
• C)when the general price level increases.
• D)there is less spending than desired.

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Definitions:

IAS 17

International Accounting Standard 17, which outlines the accounting policies and disclosures regarding leases for both lessees and lessors.

Capital Lease

This is a lease agreement that is classified as a purchase by the lessee, allowing the lessee to record the leased asset as owned on their balance sheet.

Economic Life

The estimated period over which an asset is expected to be useful and generate revenue, differing from its physical life.

Off-Balance Sheet Financing

Off-Balance Sheet Financing is a financial obligation that is not directly recorded on the company's balance sheet and is used to keep debt-to-equity ratios low and improve financial indicators.