Higher Prices and Price Increases Combined with Lower Real Output

question 23

Multiple Choice

Higher prices and price increases combined with lower real output and income,resulting from a major increase in input prices in the economy is called:

• A)deflation.
• B)inflation.
• C)stagflation.
• D)none of the above.

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Definitions:

Liabilities

Economic obligations of the company, such as money owed to lenders, suppliers, and employees.

Days Sales Outstanding (DSO)

A financial measure that indicates the average number of days it takes a company to collect payment after a sale has been made.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, often attributed to brand reputation, customer relationships, and intellectual property.

Book Value

The value of a company or asset according to its financial statements, calculated as total assets minus intangible assets (patents, copyrights) and liabilities.