Which of the Following Is an Example of an Expenditure

question 65

Multiple Choice

Which of the following is an example of an expenditure that could be recognised as either an immediate asset or an expense?

• A)Purchase of a new plant (factory)
• B)Purchase of a 12 month insurance policy
• C)Payment of an account payable
• D)Payment of wages

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Definitions:

Aggregate Demand

The total demand for all goods and services within an economy at a particular time and price level.

Inflation

The speed at which the average price level of goods and services escalates, weakening the power to purchase.

Unemployment

The situation in which individuals who are capable of working and are actively searching for a job are unable to find employment.

Natural Rate

A concept in economics referring to the level of any economic variable, such as unemployment or interest, that is not affected by short-term fluctuations.