Accelerated Depreciation Allows Firms to

question 19

Multiple Choice

Accelerated depreciation allows firms to

• A) receive less of the dollars of depreciation earlier in the asset's life.
• B) receive more of the dollars of depreciation earlier in the asset's life.
• C) not pay any taxes during an asset's life.
• D) receive more of the dollars of depreciation later in the asset's life.

---

Definitions:

Real Income

The income of an individual or group after taking into consideration the effects of inflation on purchasing power.

Monetary Neutrality

The concept that changes in the money supply only affect nominal variables in the economy (such as prices, wages, and exchange rates) in the long term, without affecting real variables (like employment and real GDP).

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust to new conditions or markets.

Quantity Theory

An economic theory that suggests the general price level of goods and services is directly proportional to the amount of money in circulation.