Which of the Following Businesses Is Most Likely to Benefit

question 26

Multiple Choice

Which of the following businesses is most likely to benefit from an election to account for its inventory under LIFO?

• A)A company producing the newest version of a tablet with ultra-long battery life.It believes it has a one-year lead over the competition.
• B)A company producing products with copper as a key component - copper prices fluctuate widely.
• C)A company producing parts for the auto industry - costs in this field tend to steadily climb.
• D)None of the above.

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Definitions:

Money Demand

The total amount of money that households and businesses wish to hold in the form of cash or deposits, at a given time.

Quantity of Money

The total amount of money available in an economy, including currency and balances held in checking and savings accounts.

Prices Fall

A situation where the amount of money required to purchase goods or services decreases, typically due to reduced demand or increased supply.

Quantity Theory

An economic theory that relates the level of money supply in an economy to the level of prices and the volume of production.