Unexpected Deflation Harms

question 21

Multiple Choice

Unexpected deflation harms:

• A) retirees on fixed incomes.
• B) borrowers of fixed-rate loans.
• C) borrowers of variable-rate loans.
• D) lenders.

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Definitions:

Contribution Margin

The amount by which a product's sales exceed its variable costs; used to cover fixed costs and contribute to profit.

Variable Cost

Costs that vary in direct proportion to changes in levels of activity or volume of goods produced, such as materials and labor.

Selling Price

The amount charged to customers for a product or service, determining the revenue earned by a business.

Contribution Margin Ratio

A financial metric that measures the portion of revenue remaining after variable costs are subtracted, expressed as a percentage of sales.