An Adjustment

question 67

Multiple Choice

An adjustment:

• A)affects two balance sheet accounts.
• B)affects two income statement accounts.
• C)affects a balance sheet account and an income statement account.
• D)always involves three accounts.

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Definitions:

Short-run Phillips Curve

A graphical representation showing the inverse relationship between the level of unemployment and the rate of inflation in an economy over the short-term.

Inflation

The degree of uptick in the universal valuation of goods and services, weakening purchase potency.

Natural Rate

The unemployment rate at which the economy operates when it is at full employment, reflecting the long-term levels of unemployment due to structural factors in the labor market.

Unemployment Rate

A measure representing the percentage of the labor force that is jobless and actively seeking employment.