Automatic Fiscal Policy Is at Work If, as Real GDP

question 4

Multiple Choice

Automatic fiscal policy is at work if, as real GDP increases,

• A) transfer payments decrease and interest rates decrease.
• B) transfer payments increase and tax revenues decrease.
• C) tax revenues increase and transfer payments decrease.
• D) tax revenues decrease and interest rates increase.

Distinguish between equity securities that do and do not qualify as investments in securities (e.g., common stocks, preferred stocks, convertible bonds, stock options).

Interpret how to account for investments in debt securities, exempting certain securities that don’t qualify.

Understand the distinctions and appropriate use of the equity method, cost method, and consolidation method for accounting for investments.

Comprehend the accounting and reporting requirements for unrealized gains and losses, including how they are reflected on the financial statements.

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Definitions:

Nitrate Ester

An organic compound containing a nitrate group bonded to an oxygen atom of an alcohol, often used in explosives and propellants.

Energetic Material

Substances that release energy rapidly when triggered, used in explosives, propellants, and pyrotechnics.

Nitroglycerin

A volatile compound used as an explosive and in medicine as a vasodilator to treat heart conditions.

Major Organic Product

The primary outcome or the most abundantly produced compound in an organic reaction, as opposed to minor products.