The Use of Fixed Costs to Increase the Percentage Changes

question 20

Short Answer

The use of fixed costs to increase the percentage changes in profits as sales activities change is called the __________ leverage.

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Definitions:

Savings

Money that is set aside from disposable income or after personal expenses have been covered, often put into a deposit or an investment for future use.

Wealth Effect

The change in spending and consumption patterns caused by changes in perceived wealth.

Recessions

are described as periods of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in successive quarters.

Saving Exceeded Investment

A situation where the amount of savings in an economy surpasses the level of investment spending.