Suppose We Observe a Fall in the Price of Good

question 160

Multiple Choice

Suppose we observe a fall in the price of good A and a decrease in the quantity of good A bought and sold.Which one of the following is a likely explanation?

• A)The law of demand is violated.
• B)The demand for A decreased.
• C)The demand for A increased.
• D)The supply of A increased.
• E)The supply of A decreased.

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Definitions:

International Financial Reporting Standards

A set of global accounting standards developed by the International Accounting Standards Board for financial reporting.

Financing Cash Flow

Cash flow related to the financing activities of a business, including issuing or buying back shares, debt issuance, and payment of dividends.

Indirect Method

A way to report cash flows from operating activities by starting with net income and adjusting for non-cash transactions.

Accrual Earnings

Earnings that are recognized when revenues are earned and expenses are incurred, not necessarily when cash is received or paid.