Which of the Following Is Not a Reason Why the AD

question 197

Multiple Choice

Which of the following is not a reason why the AD curve slopes downward?

• A)International effect
• B)Interest rate effect
• C)Substitution effect
• D)Money wealth effect

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Definitions:

Percent of Sales Method

A financial forecasting technique that estimates certain balance sheet and income statement items as a fixed percentage of projected sales.

Uncollectible Expenses

Costs that a business incurs from credits extended to customers that are not expected to be paid back, often recognized as bad debt expense.

Credit Sales

Sales made by a business where the payment is deferred to a later date, typically recorded as accounts receivable until payment is received.

Debit Balance

An account balance that occurs when the total of debits in an account exceeds the total of credits, typical for asset and expense accounts.