Which of the Following Is NOT a True Statement

question 77

Multiple Choice

Which of the following is NOT a true statement?

• A)Inflation always affects future levels of sales and expenses equally.
• B)Inflation affects the firm's cost of capital.
• C)Actual cash flows should be discounted with nominal discount rates.
• D)Inflation-adjusted cash flows should be discounted with real discount rates.

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Definitions:

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, predicting consumer spending behavior.

Aggregate Income

The total income earned by all individuals within an economy, including wages, profits, and other earnings.

Consumption Function

A formula in economics showing how total consumption is related to the gross national income.

Aggregate Income

The total income earned by individuals and businesses in an economy over a specific period, before taxes.