Which of the Following Is TRUE of an Inferior Good

question 178

Multiple Choice

Which of the following is TRUE of an inferior good?

• A)When income increases, demand remains unchanged.
• B)When income increases, demand decreases.
• C)When income increases, demand increases.
• D)Income and demand are unrelated.

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Definitions:

Net Income

The amount of money left after all expenses, taxes, and costs have been subtracted from total revenue, indicating the profit earned by a company.

Indirect Method

A cash flow statement preparation method that adjusts net income for the changes in balance sheet accounts to calculate the cash from operating activities.

Depreciation

The methodical distribution of a physical asset's cost across its lifetime, reflecting the asset's depreciation, wear, and eventual obsolescence.

Fixed Assets

Long-term tangible assets, such as buildings, machinery, and equipment, used in the operations of a business and not intended for resale.