As Macroeconomic Conditions Improve and Consumers' Incomes and Wealth Increase,their

question 36

Multiple Choice

As macroeconomic conditions improve and consumers' incomes and wealth increase,their demand for many products tends to become ________ price inelastic.As such,the ability of firms to mark up price above cost will ________.

• A)more; increase
• B)more; decrease
• C)less; increase
• D)less; decrease

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Definitions:

Profitability Index

Profitability Index (PI) is an investment appraisal technique that calculates the ratio between the present value of future cash flows and the initial investment cost, helping to determine the desirability of a project.

Cash Outflows

Money or funds leaving a business, typically for expenses, investments, or other payments.

Investment Projects

Initiatives or plans requiring capital investments aimed at generating future benefits or returns.

Simple Rate

A straightforward percentage or interest rate, typically referring to finance or investment, without compounding over time.