If an Economy Invests More Than It Loses Through Depreciation

question 43

Multiple Choice

If an economy invests more than it loses through depreciation ________.

• A)the saving rate will fall
• B)the saving rate will rise
• C)the quantity of labor will fall
• D)the capital stock will expand

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Definitions:

Supplies

Items that are used in the day-to-day operations of a business, often categorized as a current asset on the balance sheet.

Income Summary

The income summary account is used in accounting to transfer revenue and expense account balances to determine the net income or loss for a given period before closing them to the retained earnings account.

Owner's Capital

The amount of money and assets invested in a business by its owner, representing the owner's claim against the company's assets.

Operating Cycle

The operating cycle, also known as the cash conversion cycle, is the time it takes for a company to purchase inventory, sell products or services, and collect the cash from these transactions.