A Change in the Distribution of Income That Leaves Total

question 21

Multiple Choice

A change in the distribution of income that leaves total income constant will not shift the market demand curve for a product providing

• A)everyone has an income elasticity of demand of zero for the product.
• B)everyone has the same income elasticity of demand for the product.
• C)individuals have differing income elasticities for the product,but the average income elasticity for income gainers is equal to the average income elasticity for income losers.
• D)any of these conditions occur.

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered or used but not yet paid for.

Accounts Payable

Liabilities or money owed to suppliers or creditors for goods and services received but not yet paid for.

Indirect Method

An approach used in cash flow statements to adjust net income for the effects of non-cash transactions to compute cash flow from operating activities.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenues, indicating the net earnings attributable to shareholders.