-In the Above Figure, the Economy Is at Point a on the Initial

question 138

Multiple Choice

-In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF₀. What happens if disposable income decreases?

• A) Nothing; the economy would remain at point a.
• B) There would be a movement to a point such as b on supply of loanable funds curve SLF₀.
• C) The supply of loanable funds curve would shift rightward to a curve such as SLF₂.
• D) The supply of loanable funds curve would shift leftward to a curve such as SLF₁.

Realize the roles of returns, allowances, and discounts in adjusting gross sales.

Analyze the impact of promotional activities on expense categories within an income statement.

Understand the legal principles regarding negligent service and vicarious liability.

Comprehend the concepts of novation, equitable assignment, and statutory assignment in contract changes and transfers.

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Definitions:

Marginal Product

The additional output resulting from using one more unit of a given input, holding all other inputs constant.

Total Cost Curve

Represents the total economic cost of production, which is the sum of fixed and variable costs at different levels of output.

Accountants

Professionals who perform accounting functions such as audits, financial statement analysis, and advisories on financial transactions and tax strategies.

Opportunity Costs

The value of the next best alternative foregone as the result of making a decision.