As a Result of Consumption Smoothing,a Temporary Tax Rebate Tends

question 44

Multiple Choice

As a result of consumption smoothing,a temporary tax rebate tends to create a:

• A) big increase in spending now.
• B) big increase in spending over many years.
• C) small increase in spending now.
• D) small increase in spending over many years.

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Definitions:

Comparative Balance Sheet

A financial statement that presents the company's financial position at two or more points in time, facilitating the analysis of trends and changes.

Cash Dividends

Payments made by a corporation to its shareholder members, usually in the form of cash from its current or retained earnings.

Operating Activities

Transactions and events that affect the net income of a business, involving the primary revenue-producing activities of the entity.

Indirect Method

A method used in cash flow statement preparation that starts with net income and adjusts for changes in balance sheet accounts to arrive at cash provided by operating activities.