A Good Is an Inferior Good If the Consumer Buys

question 123

Multiple Choice

A good is an inferior good if the consumer buys less of it when

• A)his income rises.
• B)the price of the good rises.
• C)the price of a substitute good falls.
• D)his income falls.

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Definitions:

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.

Operating Cash Flows

Cash generated from a company's regular business operations.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is used internationally.

Direct Method

An accounting method used in cash flow statements that lists major categories of gross cash receipts and payments, providing a clearer picture of a company's cash flow from operating activities.