If Randy Experiences a Decrease in His Income, We Would

question 189

Multiple Choice

If Randy experiences a decrease in his income, we would expect that Randy's demand for

• A) each good he purchases will remain unchanged.
• B) normal goods will decrease.
• C) most goods will increase.
• D) inferior goods will decrease.

---

Definitions:

Accounts Receivable

Funds that customers owe to a company for products or services received but not yet compensated for.

Accounts Payable

Money owed by a company to its creditors for goods and services received but not yet paid for.

Operating Cycle

The period of time it takes for a company to purchase inventory, sell products, and collect cash from customers, indicating the efficiency of a business's operations.

Inventory

Inventory comprises all the goods and materials held by a company for the purpose of resale or incorporation into their product.