An Increase in the Price Level Makes Consumers Feel Less

question 62

Multiple Choice

An increase in the price level makes consumers feel less wealthy.How is this situation represented?

• A) Aggregate demand shifts right.
• B) Aggregate demand shifts left.
• C) There is a movement to right along a given aggregate-demand curve.
• D) There is a movement to the left along a given aggregate-demand curve.

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Definitions:

Fixed-Asset Turnover

A financial ratio that measures a company's efficiency in using its fixed assets to generate sales, indicating how well assets are being managed.

EVA

Economic Value Added is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Operating Income

The profit realized from a business's core operations, excluding deductions of interest and taxes.