Article Summary Although Growing at Only Half the Average Rate Following the Following

question 293

Multiple Choice

Article Summary
Although growing at only half the average rate following the seven previous recessions, consumer spending has increased 9 percent since the end of the 2007-2009 recession, and consumer confidence has been on the rise as household finances, the job market, and the housing market continue to improve. The Federal Reserve projects a 3% - 3.5% growth rate for the economy in 2014, up from the recent average of 2%. Debt payments have fallen to an average of 15.69% of after-tax income for households, the lowest level in 30 years, and lower debt payments leave households with more to spend on consumer goods.
Source: Neil Shah, "Pocketbooks Begin to Open As Household Wealth Grows," Wall Street Journal, June 25, 2013.

-Refer to the Article Summary.The increase in consumer spending discussed in the article summary was due in part to an improving housing market.This reason for the increase in consumer spending is most closely related to which of the following variables that determine the level of consumption?

• A)the interest rate
• B)current disposable income
• C)household wealth
• D)the price level

Recognize the reasons for and consequences of financial statement manipulation.

Identify the reasons and typical scenarios under which shareholders might initiate litigation.

Grasp the various types of disclosure costs and their implications on financial reporting.

Comprehend the significance of timely financial information and its impact on decision-making.

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Definitions:

Prototypical Characteristics

Attributes or qualities that are representative of a particular category or class, serving as a typical example or standard.

Leadership Categorization Theory

A theory suggesting that individuals instinctively evaluate leaders based on how closely their attributes match predefined categories or stereotypes of leadership.

Implicit Leadership Theory

A concept suggesting that people have implicit beliefs and convictions about the attributes that distinguish leaders from non-leaders.

Leader Traits

The inherent qualities or characteristics that are thought to make an individual effective as a leader.