Figure 2-3 -Points a and B in Figure 2-3 Indicate Consumption and Indicate

question 213

Multiple Choice

Figure 2-3
-Points A and B in Figure 2-3 indicate consumption and investment for two economies. Other things constant, which of the economies is likely to grow more rapidly in the future?

• A) economy A
• B) economy B
• C) They can be expected to grow at the same rate.
• D) This is uncertain since growth is not influenced by the factors indicated in this example.

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Definitions:

Accounting Policy

Distinctive postulates, grounds, methodologies, commands, and actions taken by an institution for the structuring and broadcasting of financial summaries.

Past Event

An occurrence that has taken place in the past and is relevant to the accounting and financial statements of an entity.

Recognition

The process of incorporating an item into the financial statements of an entity, including measuring its value.

Positive Theories

Theories that attempt to explain how things are in the world of finance and accounting, based on empirical evidence and facts.