Inflation Is

question 114

Multiple Choice

Inflation is

• A) not a factor in most capital-budgeting decisions because it tends to be very low in Canada.
• B) equal to the amount of interest (or nominal rate) charged for most loans.
• C) the increase in the general purchasing power of the monetary unit.
• D) the decrease in the general purchasing power of the monetary unit.

---

Definitions:

Wasted Capacity

Resources or production capabilities that are underutilized or not used to their full potential, leading to inefficiencies.

Overbooking

A strategy used in various industries where more reservations or orders are accepted than can be accommodated, based on expected cancellations or no-shows.

Excessive Cancellations

A situation where there is a higher than normal rate of order cancellations, which can disrupt operations and planning in businesses.

Marginal Revenue

The additional income received from selling one more unit of a product or service.