General Motors Buys Engines for Use in Its Vehicles from BorgWarner,which

question 9

Multiple Choice

General Motors buys engines for use in its vehicles from BorgWarner,which in turn buys many of the vehicles it needs from GM.This is an example of:

• A) nested demand
• B) derived demand
• C) reciprocity
• D) elastic demand
• E) circular buying

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Definitions:

Premium

The amount paid for an insurance policy, or the extra cost above the nominal value of something such as a bond or stock.

Adjunct Liability

A liability that is attached to an asset in a supporting role, increasing the amount recorded as the asset rather than being recognized separately.

Carrying Value

The Carrying Value, or book value, is an accounting measure that represents the value of an asset in a company's balance sheet, minus depreciation or amortization.

Registered Bonds

Debt securities whose ownership is recorded by issuing company, ensuring only the registered owner gets interest payments.