Test 1 Part 2

Which of the following items would be included in a current ratio computation?

Accounts payable, wages payable, and short-term debt. Equipment is a fixed asset, not a current asset.

Interest rates are rising. An analyst would be most likely to state that the business cycle is in which stage?

Expansion [Most Likely]

The Conference Board releases information about the economy on a monthly basis. Included are a number of different indicators. Economic indicators can be leading, lagging, or coincidental, which indicates the timing of their changes relative to how the economy as a whole changes. Which of the following is a lagging economic indicator?

Prime interest rate The prime interest rate is a lagging indicator. Nonagricultural employment is a coincident indicator. The other two choices(Manufacturers' new orders for consumer goods & Building permits (housing starts)) are leading indicators.

Which of the following acts requires publicly traded corporations to issue annual reports?

Securities Exchange Act of 1934

LMN Manufacturing Company, listed on the NYSE, is an SEC reporting company. Each of the following would require the filing of a Form 8-K EXCEPT

relocation of wholly owned subsidiary

A corporation calls in a portion of its long-term debt at 101. This will have the effect of 1. decreasing working capital 2. increasing working capital 3. decreasing net worth 4.increasing net worth

1 & 3

Which school of economists encourages a government to spend money to move the economy into an expansionary phase?

Keynesian Keynesians advocate government intervention in the workings of the economy through increased government spending, which in turn increases aggregate demand.