An Operating Loss Occurs When

question 64

Multiple Choice

An operating loss occurs when

• A)revenues exceed expenses.
• B)expenses exceed revenues.
• C)assets exceed liabilities.
• D)liabilities exceed assets.
• E)liabilities exceed owners equity.

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Definitions:

Disposable Income

The budget left for household savings and spending after the deduction of income taxes.

Autonomous Consumption

The level of consumption that occurs when income is zero, representing basic necessities that individuals will purchase regardless of their income.

APC

It is defined as the proportion of income that goes into consumption expenses, termed as the Average Propensity to Consume.

Disposable Income

Fiscal assets at households' disposal for spending and saving after income taxes have been subtracted.