Which of the Following Is NOT an Example of the Issue

question 20

Multiple Choice

Which of the following is NOT an example of the issue of time inconsistency?

• A)a central bank announced to maintain low inflation and at the same time increased money supply
• B)a government stated that they will not negotiate with hostage takers.When someone is taken hostage,it negotiates
• C)a mom says to her kids no cookie before meals and she never gives cookies before her kids eat their meals.
• D)a person on diet eats ice cream for dinner

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Definitions:

Indirect Method

A cash flow statement format that starts with net income and adjusts for non-cash transactions and changes in working capital to arrive at net cash provided by operating activities.

Comparative Balance Sheet

A financial statement that compares the balance sheets of two periods, highlighting changes in assets, liabilities, and equity.

Net Income

The total profit of a company after subtracting all its expenses from its revenues.

Direct Method

A way to prepare the cash flow statement where actual cash flow information from company’s operations segment is used.