Which of the Following Most Appropriately Describes Depreciation

question 199

Multiple Choice

Which of the following most appropriately describes depreciation?

• A) Decline in value of plant asset
• B) Allocation of cost of plant asset
• C) Physical deterioration of plant asset
• D) Gradual obsolescence of plant asset

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Definitions:

Disposable Income

Disposable income is the portion of an individual's or household's earnings left over for savings and expenditures after paying off income taxes.

Autonomous C

Autonomous consumption, the level of spending not influenced by current levels of income.

Induced C

Induced consumption, which refers to the spending by households that varies with income levels.

Induced Consumption

Induced consumption is the portion of consumer spending that increases with income, implying that as people earn more, they tend to spend more.