Special Interest Group a Receives a 1/10,000^th Slice of the Economic

question 26

Multiple Choice

Special interest group A receives a 1/10,000^th slice of the economic pie (Real GDP) .It is seeking a transfer of $1,000.For group A to be indifferent between a transfer policy and an economic growth policy,economic growth must be ________________ times larger than the _________________.

• A) 1,000; transfer
• B) 10,000; transfer
• C) 100; transfer
• D) 10,000; transfer minus $1,000
• E) 1,000; transfer; minus $10,000

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Definitions:

Business Entity Principle

An accounting concept that treats a business as separate and distinct from its owners for purposes of recording financial transactions.

Monetary Unit Principle

An accounting principle that assumes business transactions or events can be measured and expressed in monetary units.

Generally Accepted Accounting Principles

A set of widely adhered to accounting principles and norms for the preparation of financial statements.

Time Period Assumption

An accounting principle that states a business's activities can be divided into specific time periods, such as months, quarters, or years for reporting purposes.