Which of the Following Best Explains an Increase in Consumer

question 49

Multiple Choice

Which of the following best explains an increase in consumer spending?

• A)People spend more when the price level rises, because the dollars they hold worth more.
• B)People spend more when the price level rises, because the dollars they hold worth less.
• C)People spend more when the price level falls, because the dollars they hold worth more.
• D)People spend more when the price level falls, because the dollars they hold worth less.

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Definitions:

Accumulated Depreciation

The total amount of a tangible asset's cost that has been expensed over time through depreciation.

Original Cost

The initial monetary value of an asset or investment, reflecting the purchase price or production cost before adjustments like depreciation or amortization.

Gain on Sale

Profit realized from the sale of assets or investments when the selling price exceeds the book value.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.