If Macaroni and Cheese Is an Inferior Good, an Increase

question 460

Multiple Choice

If macaroni and cheese is an inferior good, an increase in income will

• A) not affect the demand for macaroni and cheese.
• B) decrease the demand for macaroni and cheese.
• C) increase the demand for macaroni and cheese.
• D) create no income effect.

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Definitions:

Operating Activities

Activities that relate directly to the primary business operations of a company, such as selling goods and services, which are reflected in the cash flow statement.

Cash Dividends

Payments made by a corporation to its shareholders from earnings, usually on a quarterly basis, representing a portion of the corporate profits.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was put into use.

Direct Method

A cash flow statement preparation method that reports major classes of gross cash receipts and payments. This method is one of two standards for creating the statement of cash flows.