In Order to Determine a Household's Budget Line, You Must

question 446

Multiple Choice

In order to determine a household's budget line, you must know the

• A) prices of the goods bought and the household's income.
• B) prices of the goods bought, but not the household's income.
• C) household's income, but not the prices of goods bought.
• D) household's income, prices of the goods bought, and the household's preferences.

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Definitions:

Market Value

The ongoing market rate for buying or selling a product or service in the open market environment.

Discounted Free Cash Flow Approach

A valuation method that estimates the value of an investment based on its expected future cash flows, discounted back to their present value.

Free Cash Flows

The amount of cash generated by a business after accounting for capital expenditures, available for distribution among all the securities holders of an entity.

Discontinued Operations

A component of a business that has been disposed of, or is classified as held for sale, and represents a separate major line of business or geographical area of operations.