If Consumers Expected the Price of a Good to Increase

question 13

Multiple Choice

If consumers expected the price of a good to increase in the near future and the price of a complement good decreased at the same time, as a result:

• A)prices would rise.
• B)prices would fall.
• C)larger quantities to be exchanged.
• D)smaller quantities to be exchanged.
• E)both prices and quantities exchanged would increase.

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Definitions:

Net Cash

The amount of cash available after accounting for cash inflows and outflows, representing a company's liquidity position.

Financing Activities

Transactions related to raising capital and repaying investors, including issuing debt, selling stock, or paying dividends.

Cash Dividends

Payments made by a corporation to its shareholder members from its earnings or reserves.

Net Cash

The amount of cash a company has on hand after all debts and liabilities have been paid.