A Reduction in Inventory Would Increase Inventory Turnover,which Means an Increase

question 73

True/False

A reduction in inventory would increase inventory turnover,which means an increase in that organization's return on assets (ROA).

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Definitions:

Substitution Effect

The economic concept that as prices rise (or incomes decrease), consumers will replace more expensive items with cheaper alternatives, holding utility constant.

Relative Price

Relative price is the price of one good or service compared to another, essentially indicating the trade-off between choosing one over the other.

Price Increases

Price Increases involve a rise in the cost of goods or services over time, often measured by inflation rates.

Demand Decreases

A situation where the quantity of goods and services that consumers are willing and able to purchase at a given price level declines.