When the Price of a Product Rises Faster Than the Inflation

question 74

Multiple Choice

When the price of a product rises faster than the inflation rate,

• A)Nominal incomes of the users of that product fall.
• B)Users of that product have higher real incomes than people who do not use the product.
• C)Nominal incomes of the users of that product rise.
• D)Real incomes of the users of that product fall.

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Definitions:

Treasury Stock

Stock that a corporation has issued and then reacquired.

Statement of Cash Flows

A financial report that provides aggregated data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

Operating activities involve the primary day-to-day functions of a business related to producing and selling its goods and/or services, reflected in the cash flow statement.

Investing Activities

Transactions involving the purchase or sale of long-term assets and other investments not considered cash equivalents.