When Al Makes the Statement,"The Cost of Living Has Increased

question 170

Multiple Choice

When Al makes the statement,"The cost of living has increased 10 percent over the past 10 years," he is

• A)making a positive statement.
• B)making a negative statement.
• C)making a normative statement.
• D)testing an economic model.
• E)identifying the standard of living-cost of living tradeoff.

---

Definitions:

Interest Coverage Ratio

A financial metric that measures a company's ability to pay interest on its outstanding debt with its operating income.

Money Multiplier

A concept in monetary economics that describes the maximum amount of money the banking system can theoretically generate with each unit of central bank money.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Net Credit Sales

The total revenue from sales made on credit, minus any returns or allowances.