Answer:
The answer is C.
Explanation:
A decrease in inventory means customers are buying inventories (goods) from the business. It is an inflow because money comes in.
Option A is incorrect because a decrease in common stock means shareholders are withdrawing their shareholding from the business and the business will pay them. This is an outflow.
Option B is incorrect because a decrease in long term debt means the business is paying its debt or redcuing its liability and this is an outflow.
Option D is also incorrect because an increase in fixed assets means the business is buying this asset with cash and this is an outflow
Answer:
The correct answer is option B.
Explanation:
When the Federal reserve bank sells government securities, the banks will purchase them and pay back fed. This payment is made out of banks' reserves. This causes the reserves to decrease.
As reserves decline, the banks will be able to provide fewer loans. Consequently, this decrease in lending will further cause the money supply to decrease.
A lien is a claim against an asset, often to get a loan. All debts related have to be paid before it is removed.
Answer:
The answer is: C) the elasticity of demand, where the shortages will be larger if demand is more inelastic.
Explanation:
When the demand for a product is completely inelastic it means that the quantity demanded for that product will be the same whether its price increases or decreases. Rarely any product is completely inelastic, but inelasticity shows a tendency of buyers to keep buying a product even if its price rises, for example gasoline.
Inelastic products don´t follow the law of supply and demand, since the price doesn´t alter the demand.
If suppliers can produce enough goods (product shortages) and the quantity demanded stays the same, the price will rise. But if the demand for the product is inelastic then the shortage will get worse since every time more people will want to buy the product and their will be less product to buy.
