Which of the Following Statements Is Correct

question 135

Multiple Choice

Which of the following statements is correct?

• A) Automotive manufacturers prefer stricter fuel economy regulations to higher gasoline taxes.
• B) Higher gasoline taxes have provided a market-based incentive for Europeans to buy more fuel-efficient vehicles.
• C) Higher gasoline taxes have had no effect on the U.S. demand for gasoline because the demand for gasoline is perfectly inelastic.
• D) Fuel efficiency regulations are more effective than gasoline taxes in reducing the demand for gasoline in the United States and Europe.

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Definitions:

Loss on Realization

A financial loss recognized when liquidating assets yields less value than initially recorded on the books.

Income Ratio

A financial metric comparing some form of an entity's income to another, providing insights into financial stability, profitability, or performance.

Capital Account Balances

The amounts recorded in the equity section of the balance sheet, representing owners' contributions and retained earnings in a business.

Liquidation

The process of winding down a company by selling off its assets to pay creditors and distribute any remaining assets to shareholders.