An Increase in Income Will

question 82

Multiple Choice

An increase in income will

• A) always increase the demand for SUVs.
• B) increase the supply of SUVs.
• C) increase the demand for SUVs if SUVs are inferior goods.
• D) increase the demand for SUVs if SUVs are normal goods.
• E) decrease the demand for SUVs if SUVs have a very low price.

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Definitions:

Commodity Exposure

The extent to which a company's future earnings, assets, or liabilities are affected by fluctuations in commodity prices.

Coffee Shop

A retail establishment that sells coffee, tea, and sometimes light meals or snacks.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Transaction Exposure

The risk of adverse changes in exchange rates affecting the value of a company's transactions in foreign currencies.