Which of the Following Developments Will Most Likely Lead to an Increase

question 142

Multiple Choice

Which of the following developments will most likely lead to an increase in the velocity of money?

• A) a decrease in the expected inflation rate
• B) an increase in money interest rates
• C) a sharp decline in using credit cards
• D) a decrease in real income

---

Definitions:

Contribution Format Income Statement

An income statement format that separates fixed costs from variable costs and is used to calculate the contribution margin.

Unit Sales

The quantity of products sold by a company, not accounting for any bulk, wholesale, or grouping discounts.

Margin of Safety

The difference between actual sales and the break-even point, indicating the amount by which sales can drop before a business incurs a loss.

Degree of Operating Leverage

Degree of operating leverage measures the sensitivity of a company's operating income to a change in sales volume, indicating the impact on profits from sales fluctuations.