The Economic Development Minister of a Country Has a List

question 90

Multiple Choice

The economic development minister of a country has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries. She asks you to pick the one you think most likely explains her country's low growth. Which of the following contributes to low growth?

• A)strong private property rights
• B)tariffs and quotas
• C)encouraging foreign investment
• D)low population growth

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Definitions:

Write Off

The accounting action of declaring that an asset is no longer useful and recording its depreciation in the financial statements.

Expense Recognition Principle

An accounting principle that matches expenses with the revenues they helped to generate, recognizing expenses in the same period as the revenues.

Direct Write-off Method

An accounting method where uncollectible accounts receivable are directly removed from the accounts when deemed irrecoverable.

Materiality Constraint

An accounting principle that allows the omission or misstatement of figures that are not significant enough to influence the decision-making process of users of financial statements.