Failures of Corporate Internal Controls and Inadequate Internal Control Systems

question 31

True/False

Failures of corporate internal controls and inadequate internal control systems allowed unethical executives at such companies as Enron and WorldCom to act in their own self-interest.

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Definitions:

Marginal Propensity

The ratio of the change in consumption or saving to the change in income, indicating how income changes affect spending or saving behaviors.

Aggregate Expenditure

The total amount of spending in the economy that includes consumer spending, investment, government spending, and net exports.

Multiplier

An economic factor that quantifies the change in income levels resulting from a change in spending or investment.

Gross Domestic Product

The total value of all goods and services produced within a country over a specific time period, serving as a broad measure of economic activity.