Relative-Price Variability Is "Automatic" When

question 78

Multiple Choice

Relative-price variability is "automatic" when

• A)firms change prices only once in a while.
• B)firms change prices often.
• C)people increase the frequency of their trips to the bank.
• D)people decrease the frequency of their trips to the bank.

---

Definitions:

Capital Expenditure Decision Process

The process of making decisions related to the acquisition of capital assets, taking into consideration their costs, benefits, and risks.

Profitability Index

A financial metric that compares the present value of future cash flows from an investment to its initial cost, used to evaluate investment attractiveness.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting.

Capital Rationing

A strategic financial approach where a company restricts its spending on new projects due to limited resources.