A Short-Term Payable May Be the Current Portion of a Long-Term

question 52

True/False

A short-term payable may be the current portion of a long-term liability, which arises when the next payment on such a debt will be made out of current assets.

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Definitions:

APC

Average Propensity to Consume, which is the fraction of income that is consumed rather than saved.

MPS

The marginal propensity to save refers to the portion of each additional dollar of income that is set aside for savings instead of being spent.

Induced Consumption

Consumer spending that increases when income increases and decreases when income decreases.

Autonomous Consumption

Consumer spending that does not change in response to fluctuations in income, reflecting basic, non-discretionary expenditures.