Which Example Is a LIKELY Response to Inflation

question 291

Multiple Choice

Which example is a LIKELY response to inflation?

• A) People choose to carry higher money balances.
• B) People tend to make fewer transactions.
• C) People tend to make more transactions.
• D) People tend to hold on to fewer interest-bearing assets.

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Definitions:

Common-Size Financial Statement

A financial analysis tool that expresses each line item as a percentage of a common base figure.

Vertical Analysis

A financial analysis method that compares different items on a financial statement to a single base figure, providing insights into the composition of those figures.

Horizontal Analysis

A financial analysis technique that compares historical financial data across several periods to identify trends and growth patterns.

Days' Sales in Inventory

A financial metric calculating the average number of days a company holds inventory before selling it, reflecting inventory management efficiency.