Recall Application 3, "Increasing Health-Care Expenditures and Crowding Out," to Answer

question 127

Multiple Choice

Recall Application 3, "Increasing Health-Care Expenditures and Crowding Out," to answer the following questions:
-According to the application, as individuals become richer, sooner or later they will substitute spending away from _______ and into _______ .

• A) nursing homes; retirement communities
• B) less expensive health care; more expensive health care
• C) consumer durables; increasing their lifespan
• D) consumer durables; stocks of HMO's

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Definitions:

Operating Activities

Activities directly related to the primary business operations, such as selling goods and services.

Net Income

A company's overall earnings remaining after deducting all expenses, taxes, and costs from its total revenue.

Cash Dividends

A distribution of a portion of a company's earnings, decided by the board of directors, paid to a class of its shareholders.

Financing Activities

Activities that result in changes in the size and composition of the equity and borrowings of a company, reported in the cash flow statement.