If We Observe That a Consumer's Budget Constraint Has Shifted

question 442

Multiple Choice

If we observe that a consumer's budget constraint has shifted inward, we can assume that the consumer will buy

• A)fewer normal goods and more inferior goods.
• B)more normal goods and fewer inferior goods.
• C)more normal goods and more inferior goods.
• D)fewer normal goods and fewer inferior goods.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, thereby resetting the temporary accounts for the new period.

Temporary Accounts

Accounts used to track transactions within a fiscal period that are then reset to zero at the start of the next period, such as revenue and expense accounts.

Retained Earnings

Part of shareholders' equity on a company's balance sheet, representing the amount of net income left over for the business after it has paid out dividends to its shareholders.