Off-Balance Sheet Financing Implies That

question 49

Multiple Choice

Off-balance sheet financing implies that:

• A)Leases would be capitalized
• B)Leases would not be capitalized in financial statements
• C)Leases would be amortized in a separate account not in the lessee's balance sheet
• D)Leases show up in the income statement, but not the balance sheet

---

Definitions:

Simple Spending Multiplier

The ratio of a change in output to a change in autonomous spending that initiated the change, representing how spending circulates through an economy.

Marginal Propensity

The portion of additional income that an individual is likely to spend on goods and services instead of saving.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, which can affect purchasing power and inflation.

Aggregate Expenditure Line

A graphical representation of the total spending in an economy, including consumption, investment, government, and net exports, at various levels of income.