If an Increase in Income Leads to in an Increase

question 132

Multiple Choice

If an increase in income leads to in an increase in the demand for peanut butter, then peanut butter is a:

• A)neutral good.
• B)normal good.
• C)necessity.
• D)complement.

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Definitions:

Sales On Account

Transactions where goods or services are sold and payment is deferred, creating accounts receivable for the seller.

Average Sale Period

The average time period that items remain in inventory before being sold, indicating the liquidity of inventory.

Common Stock

A type of equity security that represents ownership in a corporation, entitling the holder to vote at shareholder meetings and receive dividends.

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets, calculated as sales divided by total assets.