A Normal Good Is Defined as One

question 140

Multiple Choice

A normal good is defined as one:

• A)whose amount demanded will increase as its price decreases.
• B)whose amount demanded will increase as its price increases.
• C)whose demand curve will shift leftward as incomes rise.
• D)the consumption of which varies directly with incomes.

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Definitions:

Working Capital

The measure of a company's short-term liquidity, determined by subtracting current liabilities from current assets.

Short-Run Liquidity

The ability of a company to meet its short-term financial obligations and operate in the near future without facing financial distress.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Deferred Revenues

Deferred revenues refer to money received by a business for goods or services yet to be delivered or performed, recorded as a liability on the balance sheet until the obligation is fulfilled.