If Incomes Are Rising, in the Market for a Normal

question 175

Multiple Choice

If incomes are rising, in the market for a normal good,

• A)​its price will rise and the quantity exchanged will rise.
• B)​its price will rise and the quantity exchanged will fall.
• C)​its price will fall and the quantity exchanged will rise.
• D)​its price will fall and the quantity exchanged will fall.

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Definitions:

Inventory

The entire stock of materials and products that a company possesses for the aim of production or selling.

Market-to-Book Ratio

A financial ratio that compares a company's market value to its book value, indicating how investors value the company compared to its actual worth.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to determine if the stock is over or under-valued.

Book Value Per Share

The shareholder equity available per outstanding share of a company, calculated by dividing total equity by the number of shares outstanding.