The Law of Demand Indicates That

question 181

Multiple Choice

The law of demand indicates that

• A) every physical good has a use.
• B) when people want a good badly enough, they will find a way to pay for it.
• C) the desire for a good is unrelated to its price.
• D) the quantity of a good that people will buy is inversely related to the price of the good.

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Definitions:

Equity Method

An accounting method used to record investments in associate companies where the investor has significant influence but not full control, typically 20%-50% ownership. The investor's share of the investee's net income or loss is reflected in the investor's financial statements.

Net Income

A company's profit after deducting expenses and taxes from revenue.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Partial Equity Method

An accounting approach where an investor recognizes income from its investment in an associate to the extent of dividends received, differing from the full equity method which recognizes income as it's earned by the associate, regardless of dividends received.