Dennis Has Made a Purchase of $50,000 Using Trade Credit

question 32

Multiple Choice

Dennis has made a purchase of $50,000 using trade credit with terms of 2/15, net 45. How many days does he have in which to pay to receive the discount?

• A) 15
• B) 2
• C) 45
• D) 30

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Definitions:

Average Propensity

The average tendency of an entity (such as a household) to spend a portion of income; can pertain to consumption or saving.

Disposable Income

Disposable income is the portion of an individual's or household's earnings left over for savings and expenditures after paying off income taxes.

Autonomous C

Autonomous consumption, the level of spending not influenced by current levels of income.

Induced C

Induced consumption, which refers to the spending by households that varies with income levels.