Demand for a Normal Good _______ with _______ in Income

question 156

Multiple Choice

Demand for a normal good _______ with _______ in income.

• A) rises; decreases
• B) falls; increases
• C) rises; increases
• D) stays the same; increases

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Definitions:

Operating Cycle

A measure of the time span between the purchase of inventory and the collection of cash from accounts receivable, highlighting the time taken for a business to turn its inventory into cash.

Current Liabilities

Short-term financial obligations a company must pay within a year, such as accounts payable, short-term loans, and accrued expenses.

Liquidation

The process of bringing a business to an end and distributing its assets to claimants, often occurring when a company is insolvent and unable to meet its financial obligations.

Operating Cycle

An operating cycle is the average period of time it takes for a business to convert its inventory into cash proceeds from sales.