In a One-Period Economy

question 23

Multiple Choice

In a one-period economy

• A) consumption equals disposable income.
• B) consumption equals disposable income plus the value of non-market work.
• C) savings is always positive.
• D) consumers may increase their consumption by borrowing.
• E) consumers save more than they consume.

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Definitions:

Cash Account

An account recording the amounts of cash received and paid out in transactions.

Credit

A financial term denoting the provision of money, goods, or services with the expectation of future payment.

Consuming Goods

The action of using up goods or products, thereby reducing inventory.

Generating Revenues

The process by which a company earns income through the sale of goods or services.