Which of the Following Statements About Non-Monetary Assets Is True

question 43

Multiple Choice

Which of the following statements about non-monetary assets is true?

• A)Under the temporal method, non-monetary assets are translated at the closing rate.
• B)Under the temporal method, non-monetary assets are translated at the average rate.
• C)Under the current-rate method, non-monetary assets are translated at the historical rate.
• D)Under the current-rate method, non-monetary assets are translated at the closing rate.

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Definitions:

Marginal Propensity

The tendency of an individual or household to spend an additional dollar of income on consuming goods and services.

Simple Spending Multiplier

The ratio of a change in output to a change in autonomous spending that caused it, illustrating the impact of fiscal policy on total economic output.

Simple Spending Multiplier

A formula used in economics to determine the impact of a change in autonomous spending on the aggregate output, highlighting the amplification of initial spending through the economy.

Marginal Propensity

The ratio of change in an economic variable (such as consumption or saving) in response to a change in another (such as income), indicating the responsiveness of the variable.