Suppose That Investment Decreases by $15 Billion

question 59

Multiple Choice

Suppose that investment decreases by $15 billion. If the multiplier is 2.5, the aggregate demand curve

• A)shifts leftward by a horizontal distance of $37.5 billion.
• B)shifts leftward by a horizontal distance greater than $37.5 billion.
• C)shifts leftward by a horizontal distance less than $37.5 billion.
• D)shifts upward by a vertical distance of $37.5 billion.
• E)is not affected.

Identify the criteria for significant influence and its implications for equity accounting.

Adjust the investor's share of profit for intra-group transactions resulting in unrealised profits.

Understand and apply the concept of significant influence in determining the need for equity accounting.

Recognize and calculate goodwill arising from the acquisition of an interest in an associate.

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Definitions:

F-statistic

A ratio used in statistical analysis to determine the significance of a group of variables in a regression model.

F-to-enter

A criterion used in statistical analysis to decide when a variable should be added to a regression model based on the F-statistic value.

Multiple Regression Analysis

A statistical strategy that employs a selection of explanatory variables to predict the outcome of a variable of interest.

Stepwise Regression

A method of regression analysis in which the selection of predictive variables is carried out by an automatic procedure.