As Disposable Income Decreases, Consumption

question 89

Multiple Choice

As disposable income decreases, consumption

• A) and saving both increase.
• B) and saving both decrease.
• C) increases and saving decreases.
• D) decreases and saving increases.

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Definitions:

Cost Leadership

A business strategy aimed at becoming the lowest-cost producer in an industry.

Overhead

Ongoing business expenses not directly tied to creating a product or service but necessary for the business's operation, such as rent, utilities, and administrative costs.

Inventory Management

The process of overseeing and controlling the ordering, storage, and use of components that a company will use in the production of the items it will sell as well as overseeing the quantities of finished products for sale.

Strategy

A plan of action designed to achieve a major or overall aim, often involving the allocation of resources and consideration of competitors.