If Some of a Person's Wealth Is in Cash,it Follows

question 38

Multiple Choice

If some of a person's wealth is in cash,it follows that

• A) this person's monetary wealth will change as the price level changes.
• B) this person's monetary wealth will not change as the price level changes.
• C) this person is wealthier than a person who holds all his wealth in nonmonetary form.
• D) a and c
• E) b and c

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Definitions:

Fixed Costs

Fixed costs are expenses that do not vary with the level of production or sales within a certain range, such as rent, salaries, and insurance.

Automated Machine

A machine operated with minimal human intervention, typically using computer-controlled systems.

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the extent to which sales can drop before a business incurs a loss.

Variable Expenses

Costs that fluctuate in direct proportion to changes in the level of business activity or output.