Which of the Following Must Be True If Good X

question 131

Multiple Choice

Which of the following must be true if good X is a normal good and income increases?

• A) The demand for X will increase, and thus the price and quantity sold and bought will decrease.
• B) The demand for X will decrease, and thus the price and quantity sold and bought will decrease.
• C) The demand for X will increase, and thus the price and quantity sold and bought will increase.
• D) The demand for X will decrease, and thus the price and quantity sold and bought will increase.

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Definitions:

Retained Earnings

It represents the cumulative amount of net income earned by a company that is retained rather than distributed to its shareholders as dividends.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, reflecting the ownership interest of shareholders.

Cash Dividend

A cash dividend is a payment made by a company out of its profits to shareholders, typically on a quarterly basis, in the form of cash.

Net Income

The total profit or loss of a company after all revenues, expenses, taxes, and costs have been subtracted, reflecting the financial performance over a specific period.