Assume the Cost of Certain Inputs Used to Produce Artificial

question 23

Multiple Choice

Assume the cost of certain inputs used to produce artificial Christmas trees increases and,at the same time,the economy moves into a recession,causing the incomes of consumers to decrease.Which of the following will happen to the equilibrium price and quantity of artificial Christmas trees? (Assume artificial Christmas trees are normal goods.)

• A)Price will increase; quantity cannot be determined.
• B)Price will decrease; quantity cannot be determined.
• C)Quantity will increase; price cannot be determined.
• D)Quantity will decrease; price cannot be determined.

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Definitions:

Cash Management

The process of collecting, managing, and investing a company's cash in a way that optimizes its liquidity and profitability.

Lock-box System

A collection and processing service provided by banks to speed up the receipt and deposit of checks from customers.

Disbursement Float

The time delay between when a check is issued and when it is deducted from the payer's bank account.

Issuance

The process of offering new or existing securities for sale to investors by a corporation or government entity.