A Number of Economic Variables Affect Both the Economy and Industries.Which

question 90

Multiple Choice

A number of economic variables affect both the economy and industries.Which of the following statements is false?

• A) Industries with high levels of operating and financial leverage should benefit from lower inflation rates.
• B) Banks generally benefit from volatile interest rates, while stable interest rates reduce margins.
• C) Consumers who are optimistic about the economy will spend money on high-priced items, such as autos and houses.
• D) The abundance or scarcity of input components can affect the perceived attractiveness of an industry.
• E) None of the above (that is, all are true statements)

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Definitions:

Decision Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Sensory-Specific Satiety

The reduced satisfaction or interest in a specific taste or type of food after consuming a significant amount of it, leading to a desire for flavor variety.

Mental Accounting

The cognitive process by which people categorize, evaluate, and keep track of financial activities, often leading to irrational financial behaviors.

Variety Seeking

The behavior exhibited by consumers who seek new and different experiences or products, often driven by a desire for novelty or change.