If You Expect the Economy Is Going to Boom and Average

question 125

Multiple Choice

If you expect the economy is going to boom and average income in the economy will rise in the foreseeable future, the type of firm that would be able to increase its sales if your expectations are met is

• A)one that sells an inferior good.
• B)one that sells a necessity good.
• C)one that sells a luxury good.
• D)one that sells a price-inelastic good.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period.

Cash Investments

Money put into financial instruments or assets with the expectation of achieving a profit.

Statement of Cash Flows

A financial report that details the inflows and outflows of cash for a business over a specific period, highlighting operations, investing, and financing activities.

Financing Activities

Transactions related to raising, repaying, or managing the long-term capital and funding of an entity, reflected in the cash flow statement.