-Refer to Exhibit 3-6

question 64

Multiple Choice

-Refer to Exhibit 3-6.If an increase in income causes the demand for good X to shift from D₁ to D₃,then good X is

• A) a normal good.
• B) an inferior good.
• C) a substitute good.
• D) a complementary good.
• E) a neutral good.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible fixed asset over its useful life, reflecting the consumption or wear and tear of the asset.

Equity Infusion

Capital that is provided to a company in exchange for partial ownership, often used to boost the company's growth or stabilize its financial health.

Retention of Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends, often used for reinvestment.

Common Stock

Equity ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends or stock appreciation.