As Income Rises,the Demand for Inferior Goods

question 134

Multiple Choice

As income rises,the demand for inferior goods

• A)rises.
• B)falls.
• C)stays about the same.
• D)cannot be determined.

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Definitions:

Deferred Taxes

Taxes that are due on income or transactions that have been recorded in the financial statements but have not yet been settled in cash.

Tax Contingency Reserve

A tax contingency reserve is an accounting provision made to cover potential tax liabilities that may arise due to uncertainties in the interpretation of tax laws or disputes with tax authorities.

Earnings Quality

An assessment of the true income generated by a company, gauging how accurately the reported income reflects the company's true earning power.

Deferred Tax Assets

Assets on a company's balance sheet that may be used to offset future tax liabilities.