The Given fiGure Suggests That

question 40

Multiple Choice

The given figure suggests that

• A) consumption would be $60 billion even if income were zero.
• B) saving is zero at the $120 billion income level.
• C) as income increases, consumption decreases as a percentage of income.
• D) as income increases, consumption decreases absolutely.

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Definitions:

Perpetual Inventory System

An inventory management system that updates inventory records for each purchase and sale in real time.

Cost Of Goods Sold

The total expenses directly related to the production of goods sold by a company, including material and labor costs.

FOB Shipping Point

A term used in shipping agreements indicating that the buyer assumes responsibility for the goods and the cost of transport once the goods leave the seller's premises.

Title To Merchandise

The legal right or ownership of goods and products, which is transferred from the seller to the buyer when the conditions of a sale are met.