The Quantity of Good M Is Measured Along the Vertical

question 179

Multiple Choice

The quantity of good M is measured along the vertical axis, and the quantity of good N is measured along the horizontal axis. If the prices of both goods M and N declines by 50% each, then the budget line

• A) shifts inward to the left by 50%.
• B) shifts outward to the right by 50%.
• C) shifts outward to the right by 100%.
• D) rotates clockwise by 180 degrees.

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Definitions:

Operating Cash Flow

The cash generated by a company's normal business operations, indicating whether a company can generate enough positive cash flow to maintain and grow its operations.

Net Working Capital

The financial contrast between a company's short-term assets and its short-term obligations.

Fixed Assets

Long-term tangible assets used in the operation of a business that are not likely to be converted to cash in the short term, such as buildings, machinery, and equipment.

Financially Solvent

The ability of an individual or organization to meet its long-term financial obligations.