The Boomerang Effect

question 15

Multiple Choice

The boomerang effect

• A)the possibility that if the secret formula of Coca-Cola were leaked, that other firms would come up with similar products and hurt Coca-Cola's sales.
• B)the possibility that FDI in an undeveloped nation will lead to a group of workers who have enough money to afford the firm's products, leading to an increase of sales and increase of workers and so on.
• C)the possibility that FDI in an undeveloped nation will lead to a group of domestic workers no longer have enough money to afford the firm's products, leading to an decrease of sales.
• D)none of the above

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Definitions:

Discretionary Income

Discretionary income is the amount of an individual's income left for spending, investing, or saving after taxes and personal necessities (like food, shelter) are taken care of.

Necessities

Essential items and services required for basic human survival and well-being, such as food, water, shelter, and healthcare.

Federal Income Taxes

Taxes imposed by the government on the income of individuals, corporations, and other entities.

Consumer Confidence

is a measure of how optimistic or pessimistic consumers are about their financial prospects and the state of the economy, impacting their spending and saving behaviors.