Suppose a Long Lost Relative Died and Left You a Trust

question 36

Essay

Suppose a long lost relative died and left you a trust fund worth $1 million that you will receive ten years from now. What effect, if any, will this have on your demand for airline travel? (Assume that airline travel is a normal good.)

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Definitions:

Perpetual Inventory Method

An inventory management method where stock levels are updated in real-time with each sale or purchase transaction.

Petty Cash Fund

Petty cash fund is a small amount of cash kept on hand for making immediate payments for minor and incidental expenses.

Perpetual Inventory System

An inventory management system where inventory levels are updated in real-time or on a continuous basis following each purchase or sale transaction.

General Journal

A primary accounting record used to record all types of transactions and events in chronological order before they are posted to specific accounts.