What Effect Did the Requirement to Replace the Minimum Liability

question 6

Multiple Choice

What effect did the requirement to replace the minimum liability requirement with the funded status of a pension plan have for underfunded pension plans?

• A)Return on assets decreased.
• B)There was no effect on return on assets.
• C)The debt-to-equity ratios increased.
• D)Working capital increased.

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Definitions:

Aggregate Consumption

The total spending by households on goods and services within an economy during a specific period.

Consumption Function

A macroeconomic term that describes the relationship between total consumption and gross national income.

Aggregate Income

Aggregate Income is the total income earned by all individuals or entities in the economy within a specific period.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, indicating how income changes affect spending habits.