If Lily's Consumption Function Is of the Form [C =

question 222

Multiple Choice

If Lily's consumption function is of the form [C = 100 + 0.8Y], her saving equals zero at an income level of

• A) 180.
• B) 500.
• C) 800.
• D) cannot be determined from the given information

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Definitions:

Adjustments

Modifications made to accounting entries to correct errors or allocate revenues and expenses to the appropriate accounting period.

Match Expenses

The accounting principle that requires expenses to be recorded in the same accounting period as the revenues that are earned as a result of those expenses.

Adjusting Entry

Journal entries made at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Balance Sheet Account

An account found on the balance sheet, which is one of the three principal financial statements; these accounts include assets, liabilities, and shareholders' equity.