When Attempting to Identify the Economic Characteristics of the Industry

question 39

Multiple Choice

When attempting to identify the economic characteristics of the industry in which a particular firm participates an analyst might ask which of the following questions?

• A) Does technological change play an important role in the firm maintaining a competitive advantage?
• B) Has the firm diversified across several geographic markets?
• C) Has the firm recognized revenues at the proper time?
• D) Has the firm structured transactions to make it look more profitable than economic conditions suggest?

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Definitions:

Disposable Income

The money that remains for savings and expenses after income tax deductions from a person's or family's earnings is the disposable income.

APS

Average Propensity to Save, the proportion of total income that is saved by a household or economy.

Saving

The act of setting aside a portion of income for future use, typically in a bank account or other secure investment.

Disposable Income

Resources meant for household spending and saving once income tax obligations are settled.