If the Government Wanted to Give People a Negative Direct

question 5

Multiple Choice

If the government wanted to give people a negative direct incentive not to save money,what would be the appropriate policy?

• A) providing individuals a subsidy to save their money
• B) providing funding for an advertising campaign encouraging people to spend more money
• C) informing individuals that saving money causes people not to spend money,which will cause them to lose their jobs
• D) imposing a tax on individuals for saving their money
• E) informing consumers about all that they could buy with their money with the hope that they spend more

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Definitions:

Acquisition Differential

The difference between the purchase price of an acquired company and the book value of its assets and liabilities.

Push Down Accounting

An accounting method in which the financial statements of a subsidiary are adjusted to reflect the parent company's basis of assets, liabilities, and any goodwill created in the acquisition.

Negative Acquisition Differential

occurs when the sum of the fair values of identifiable net assets exceeds the cost of acquisition, leading to an immediate gain in the acquirer's financial statement.

Negative Goodwill

A financial situation where the purchase price of a company is less than the fair market value of its assets minus liabilities.