What Is One of the Consequences of Accumulating Capital

question 74

Multiple Choice

What is one of the consequences of accumulating capital?

• A) Accumulating capital requires that society sacrifice consumption in the present.
• B) Accumulating capital allows society to consume more in the present.
• C) Accumulating capital decreases saving rates.
• D) Accumulating capital increases income inequality.

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Definitions:

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair value of its net identifiable assets.

Consolidation Approach

A method in accounting where the financial statements of a parent company and its subsidiaries are presented as one.

Parent-Company Method

A method of accounting wherein investments in subsidiaries are shown at cost or at fair value within the parent company's financial statements.

Ownership Risk

The risk of loss in value or return on investment due to changes in ownership structure or disputes over property rights.