A Decrease in Net Wealth Will

question 2

Multiple Choice

A decrease in net wealth will

• A)increase consumption and saving at each level of income
• B)increase saving and decrease consumption at each level of income
• C)decrease consumption and saving at each level of income
• D)increase consumption and decrease saving at each level of income
• E)have no effect on consumption,since consumption is a function of income

---

Definitions:

Depreciation Expense

Distributing the expense of a physical asset across its lifespan to represent its diminishing value over the years.

Intra-Entity Transfer

Transactions involving the transfer of assets or liabilities between divisions within the same company.

Consolidation Process

The procedure of combining and presenting the financial results of several subsidiaries and the parent company as one cohesive financial statement.

Noncontrolling Interest

The portion of equity interest in a subsidiary not held by the parent company.