The Law of Demand States That, If Nothing Else Changes

question 55

Multiple Choice

The law of demand states that, if nothing else changes,

• A) a rise in the price of a product or service causes a decrease in quantity demanded.
• B) a rise in the price of a product or service causes a decrease in quantity supplied.
• C) an increase in incomes causes a decrease in quantity demanded.
• D) a rise in the price of a product or service causes an increase in quantity demanded.
• E) an increase in incomes causes an increase in quantity demanded.

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Definitions:

Full Consolidation

is a method of accounting where a parent company combines its financial statements with those of its subsidiaries as if they were a single entity.

Wholly Owned Subsidiaries

Companies that are completely owned by another company, allowing the parent company full control over operations and decision-making.

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as those of a single economic entity.

Entity Concept

An accounting principle that treats a business as a separate entity from its owners for financial reporting purposes.