If the Balance Sheet of a Firm Indicates That Total

question 93

Multiple Choice

If the balance sheet of a firm indicates that total assets exceed current liabilities plus shareholders' equity,then the firm has:

• A) no retained earnings.
• B) long-term debt.
• C) no accumulated depreciation.
• D) current assets.

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Definitions:

APS

Assumes "APS" refers to "Average Propensity to Save," which is the proportion of total income or output that is saved rather than spent on consumption.

Induced Consumption

Refers to the portion of consumer spending that increases or decreases in response to changes in income.

Disposable Income

The pot of funds households have at their disposal for saving and spending, post-income tax.

MPC

refers to the Marginal Propensity to Consume, which is the fraction of additional income that a household spends on consumption.