For a Normal Good

question 71

Multiple Choice

For a normal good:

• A)the income effect is negative when the price decreases.
• B)the income effect is zero when the price increases.
• C)the income effect is positive when the price increases.
• D)the income effect is negative when the price increases.

---

Definitions:

Operating Cycle

The duration between a company's purchase of inventory and the receipt of cash from accounts receivable, reflecting the efficiency of a company's cash flow.

Inventory

refers to the goods and materials a business holds for the ultimate goal of resale or production.

Credit Card

A payment card issued to users as a method of payment allowing the cardholder to borrow funds, typically at point of sale, under the condition of paying back the borrowed money plus interest.

Inventory Period

The average time it takes for a company's inventory to be sold and replaced.