If a Decrease in the Price of Good Y Causes

question 157

Multiple Choice

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that

• A) Y and Z are complements.
• B) Y and Z are substitutes.
• C) Y and Z are unrelated.
• D) the demand for Y is elastic, but the demand for Z is inelastic.

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Definitions:

Time Period Assumption

An accounting principle that suggests a business's activities can be divided into specific time periods for reporting purposes.

Fiscal Year

The one-year period an organization uses for accounting purposes and preparing financial statements, which may or may not align with the calendar year.

Revenue Recognition Principle

A fundamental accounting principle that dictates when revenue should be recognized in the financial statements, typically when it is earned and realizable.

Prepaid Expenses

Funds disbursed before receiving goods or services, documented as assets until they are utilized or consumed.