Which of the Following Statements Is False

question 39

Multiple Choice

Which of the following statements is false?

• A) If the price of a good falls, the substitution effect will always induce the consumer to consume at least as much of the good as before the price change.
• B) All Giffen good are inferior goods.
• C) As the price of an inferior good increases, the income effect will induce the consumer to consume less of the good.
• D) As the price of a normal good falls, the income effect will result in an increase in consumption of the good.

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Definitions:

Long-term Investments

Assets that a company intends to hold for more than a year, such as stocks, bonds, real estate, and other financial instruments.

Working Capital

Working capital is the difference between a company's current assets and current liabilities, indicating the liquidity available to run its operations.

Articles of Incorporation

A legal document that establishes a corporation's existence, filed with a governmental body in the jurisdiction where the corporation is headquartered.

Double Taxation

A situation where the same income is taxed twice: first at the corporate level on profits, and then again at the shareholder level on dividends received.