An Increase in Expected Future Disposable Income ________ Consumption Expenditure

question 235

Multiple Choice

An increase in expected future disposable income ________ consumption expenditure and ________.

• A) increases; shifts the consumption function upward
• B) decreases; shifts the consumption function downward
• C) increases; shifts the consumption function downward
• D) decreases; shifts the consumption function upward
• E) increases; results in a movement upward along the consumption function

---

Definitions:

Gross Profit Method

An inventory estimation technique that uses the historical gross profit margin to estimate the cost of goods sold and ending inventory.

Physically Counting

The manual process of counting inventory items one by one to verify the quantity on hand.

Current Assets

Assets that are expected to be converted into cash within one year or one business cycle.

Balance Sheet

A statement that provides a snapshot of a company's financial status, including assets, liabilities, and shareholders' equity at a defined point in time.