When Inflation Pushes Up Prices in the Economy,input Prices Are

question 119

Multiple Choice

When inflation pushes up prices in the economy,input prices are ________ and revenues ________ in the short run.

• A) flexible; remain unchanged
• B) sticky; increase
• C) sticky; remain unchanged
• D) flexible; decrease
• E) flexible; increase

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Definitions:

Profitability Analysis

The process of reviewing and evaluating a company's ability to generate income (profit) relative to revenue, balance sheet assets, operating costs, and equity over time.

Horizontal Analysis

A method of financial analysis in which financial statements figures for a period are compared to those of the previous period to determine the changes in dollar amounts and percentages.

Liquidity Ratios

Financial metrics used to measure a company's ability to pay off its short-term liabilities with its short-term assets.

Dollar Amount Changes

Alterations in financial figures, reflecting increases or decreases in values such as revenues, expenses, assets, or liabilities over a period.