Suppose Firms Become More Optimistic About Future Profitability

question 120

Short Answer

Suppose firms become more optimistic about future profitability. What will this shock do to Y, i, E, and TB?

---

Definitions:

Normal Balance

The part of an account, whether debit or credit, that is used to log increases in the account's value.

Account Nature

Refers to the classification of an account as either an asset, liability, equity, revenue, or expense.

Recorded Voucher

A documented voucher that has been entered into a financial accounting system.

Periodic Inventory Method

An accounting method that calculates the cost of goods sold and ending inventory levels at the end of an accounting period by conducting a physical count.