The Phar-Mor Fraud Began When Management

question 49

Multiple Choice

The Phar-Mor fraud began when management:

• A)Forgot to change the budgeted figures that had been incorrectly computed.
• B)Attempted to make the actual net income match the budgeted amounts.
• C)Overstated their expenses to cover amounts embezzled from the company.
• D)Understated the revenue in order to reduce the tax payable to the IRS.

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Definitions:

Interest-Rate Effect

The interest-rate effect describes how changes in the central bank's interest rate influence the level of overall spending in the economy by affecting borrowing costs.

Price Level

A measure of the average of current prices across the entire spectrum of goods and services produced in the economy.

Money Demand

The desire to hold cash or cash-equivalents and the quantity of money that individuals or businesses want to hold.

Government Expenditures

The total amount of money that a government spends on public services, infrastructure, defense, and welfare programs.