If the Government Wanted to Give People a Negative Direct

question 5

Multiple Choice

If the government wanted to give people a negative direct incentive not to save money,what would be the appropriate policy?

• A) providing individuals a subsidy to save their money
• B) providing funding for an advertising campaign encouraging people to spend more money
• C) informing individuals that saving money causes people not to spend money,which will cause them to lose their jobs
• D) imposing a tax on individuals for saving their money
• E) informing consumers about all that they could buy with their money with the hope that they spend more

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Definitions:

Impairment Loss

A loss recognized in the financial statements when the carrying amount of an asset exceeds its recoverable amount.

Cost Model

An accounting approach that measures an asset based on its historical cost minus any accumulated depreciation and impairment losses.

Impairment

Reduction in the recoverable value of an asset below its carrying amount.