Three basic corporate strategies to creating value and achieving market stature are operational excellence, product leadership, and customer intimacy. Joe's company prides itself on efficient production and delivery of products, in addition to offering low prices and convenience to its customers.
What are the corporate strategies?
A corporate strategy is a long-term plan with specific objectives for a business. Although each goal's objective may vary, the main aim of a corporate strategy is to advance the business. The corporate strategy of a corporation could be to prioritize sales, expansion, or leadership.
Corporate strategy is to generate higher sustained economic rents from a group of companies than those companies would otherwise produce on their own or when controlled directly by a group of shareholders.
Cost, quality, distribution, technology, and intellectual property are the only five corporate tactics (IP). These five concepts, or a mixture of them, form the basis of all corporate strategy.
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Which of the following are assumptions made in the model of pure monopoly?
A. The firm is a single-price monopolist; it charges the same price for all units of output.
B. No unit of government regulates the firm.
C. The government regulates the firm.
D. The firm is a multi-price monopolist; it charges different prices for all units of output.
E. Patents, economies of scale, and resource ownership secure the firm's monopoly.
The firm is a single-price monopolist, it charges the same price for all units of the output. This is the assumption made in the model of pure monopoly. Hence, option A is appropriate.
What is the Single-Price Monopolist?
A company with a single price monopolist is required to charge all of its clients the same amount for each unit of product it produces. Discrimination in pricing. A company that has the power to charge various prices for various quantities of an item or service is said to have a price-discriminating monopoly.
The production of a single-price monopolist is set at the price level at which marginal revenue and marginal cost are equal. Prices and output were higher and lower in monopolies than they were in perfectly competitive enterprises.
Hence, option A is correct.
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All else equal, a stock dividend will _____ the number of shares outstanding and ______ the value per share.(a) increase; increase(b) increase; decrease(c) not change; increase(d) decrease; increase
(b) increase; decrease
All else equal, a stock dividend will increase the number of shares outstanding and decrease the value per share.
A dividend is paid when a company is doing well and wants to reward its shareholders for their investment. A dividend is a payment made to shareholders from a company's earnings. Dividends are paid out in cash or additional stock, and they are an effective way for businesses to communicate their financial stability and profitability to the corporate sphere in general.
When a company pays cash dividends to its shareholders, the total value of all dividends paid is deducted from the stockholders' equity; however, the effect of dividends varies depending on the type of dividends paid. Stock dividends have a different impact on stockholder equity than cash dividends.
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Deals to piggyback on third-party mailing lists can involve purchasing ads for cash or bartering in exchange for concert tickets.
True
False
The claim that deals can be made to piggyback on third-party mailing databases is accurate. These transactions can entail exchanging for concert tickets in exchange for ads that have been purchased.
What are third-party mailers?Companies that post on behalf of brands that they do not wholly own are known as third-party mailers. ESPs, consultancies and white labels are just a few of the businesses that some third-party mailers provide service platforms for.
Other third-party mailers concentrate their efforts on distributing mail that advertises the goods and services of other businesses.
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ian buys a cell phone in jiffy mart, using the means that accounts for more retail payments than any other. this means of payment is
Lan purchases a cell phone at Jiffy Mart using the methods that account for the majority of retail payments. A debit card is the method of payment for this.
What is a debit card?When making purchases, debit cards eliminate the need to carry cash or physical checks and can also be used to withdraw cash from ATMs.It may not be possible to make a particularly large purchase with a debit card because debit cards typically have daily purchase limits.Usually, you can buy things with a debit card, with or without a personal identification number (PIN).If you use your debit card to withdraw cash from an ATM that is not affiliated with the bank that issued your card, you might have to pay an ATM transaction fee.Similar to credit card reward programs, some debit cards offer reward programs like 1% back on all purchases.Lan purchases a cell phone at Jiffy Mart using the methods that account for the majority of retail payments. A debit card is the method of payment for this.
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in which of the following is a firm's foreign operations integrated into the activities and responsibilities of each department to gain operative specialization and economies of scale?
There are several firms’ foreign operations that we can find where each operation has its own focus and characteristics. The type of firm's foreign operations integrated with the responsibilities and activities of each department to gain economies of scale and operative specialization is a global functional structure.
What is Global Functional Structure?A multinational company can experience several obstacles, especially in its operations. The things that are very important for a multinational company to have is functional leadership and centralized control. These two things are needed to create standards for company performance in each country. The global functional structure has the goal of creating global operations based on functions. Therefore, the things that are considered are centralized control, leaner managerial staff, and functional leadership.
This question is incomplete, The complete question is as follows:
There are several firms’ foreign operations that we can find where each operation has its own focus and characteristics. The type of firm's foreign operations integrated with the responsibilities and activities of each department to gain economies of scale and operative specialization is a
A. Global geographic structure
B. Matrix structure
C. Global functional structure
D. Foreign structure
Hence, the correct option is (C).
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what is the motivation for individuals to hold money? a. to reduce risk b. to provide liquidity c. to facilitate transactions d. all of the above
The motivation for individuals to hold money are, to reduce risk, to provide liquidity, to facilitate transactions. Therefore, Option d: All of the above is correct option.
Why individuals hold money?
Keynes asserts that people keep currency on hand for three reasons:
transactions, precaution, and speculation.The requirement for cash for current transactions for both personal and business exchange is closely proportional to the degree of income and is the driving force behind storing cash.
What are the motives of holding money?
Transactional motive of moneyPrecautional motive of moneySpeculation motive of moneyRead more about holding money
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For the following scenarios, compute the maximum total deductible contribution to the the traditional IRA contributions for 2015. Juan, age 41, earns a salary of $28,000 and is not an active participant in any other qualified plan. His wife, Agnes, has no earned income. Juan wishes to contribute as much as possible to his own IRA.
Tax: A tax is a obligatory economic rate or a few different sort of levy imposed on a taxpayer through a governmental organization a good way to fund authorities spending and various public expenditures.
The required details for Tax in given paragraph
Tax compliance refers to coverage moves and character behavior aimed toward making sure that taxpayers are paying the proper quantity of tax on the proper time and securing the best tax allowances and tax reliefs. The first recognized taxation befell in Ancient Egypt round 3000–2800 BC. A failure to pay in a well timed manner (non-compliance), in conjunction with evasion of or resistance to taxation, is punishable through law. Taxes consist of direct or oblique taxes and can be paid in cash or as its exertions equivalent. Most international locations have a tax machine in place, a good way to pay for public, not unusual place societal, or agreed countrywide wishes and for the capabilities of authorities. Some levy a flat percent rate of taxation on non-public annual profits, however most scale taxes are modern primarily based totally on brackets of annual profits amounts.
Most international locations rate a tax on an character's profits in addition to on company profits. Countries or subunits regularly additionally impose wealth taxes, inheritance taxes, property taxes, present taxes, belongings taxes, income taxes, use taxes, payroll taxes, duties and/or tariffs.
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in calculating the cpi, a fixed basket of goods and services is used. the quantities of the goods and services in the fixed basket are determined by
In calculating the CPI, a constant basket of items and services is used. The quantities of the items and services in the fixed basket are decided by: a. surveying consumers.
The products protected in the fixed basket are commonly determined through surveying consumers.
What is the fixed basket CPI?It is based on the usual fee of a constant basket of goods and offerings bought through a normal consumer, relative to rate of the identical basket in some base year. By consisting of a broad range of lots of goods and services with the constant basket, the CPI can achieve an correct estimate of the value of living.
How do you calculate CPI for basket of goods?To discover the CPI in any year, divide the value of the market basket in 12 months t through the cost of the equal market basket in the base year. The CPI in 1984 = $75/$75 x one hundred = 100 The CPI is simply an index cost and it is indexed to a hundred in the base year, in this case 1984.
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The advantage of planning is it helps in better controlling the business operation but the disadvantage is that increases the cost of the project by an increase in the budget.
What is planning?Planning refers to deciding or designing a path or roadmap about what things will be required in order to perform business operations to achieve the vision of the organization.
The main benefit of planning it helps in controlling operations and encourages innovation and creativity effectively through brainstorming and research.
The drawback of the planning process it seems as costly which disturbs the budget of the organization as well as it appears resistant to change which is quite challenging.
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is single, age 68, and retired. rukeem's taxable income for 2022 is $2,500, and the tax on this amount is $250. rukeem's tax credit for the elderly is $225. which of the following statements is true?
The amount of the standard deduction has been increased for all filers for the year 2021.These sums are:$12,550 for a single or married filing separately.$25,100 for married couples filing jointly or a qualified widow(er).
In Australia in 2022, how much can a retiree earn before taxes?
Australian residents with lower incomes can save money on their taxes by taking advantage of income tax offsets.Together with the $18,200 tax-free threshold, LITO lets you earn up to $21,884 in the 2022-23 fiscal year before paying any income tax.
What is the maximum exemption from income tax for seniors?
Rs.The basic exemption limit, up to which an ordinary individual tax payer is exempt from paying tax, is currently Rs. 3 lakh.2.50 million for the AY 2021–22.However, the basic exemption limit is increased to Rs for Senior Citizens.3 lakh.
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carnegie mellon university has the best master's program in financial engineering. the wall street banks should
The top financial engineering master's program is offered by Carnegie Mellon University. The Wall Street banks ought to recruit from CM and other prestigious institutions.
What exactly is a financial engineering masters?Master of Science in Financial Engineering. Multidisciplinary tools from the engineering, math, and programming fields are used in the study of financial engineering. The full-time instruction in the use of engineering methodologies and quantitative methods in finance is offered by the FE Program at Columbia.
Is financial engineering a decent master's program?More so than most, the rapid response. Graduates in financial engineering often work in the banking and investing industries, where their task is to make money grow. Unsurprisingly, the work is profitable. The median income for MSFE owners is $95,000, while some make considerably more.
Is Carnegie Mellon a reputable finance institution?The Tepper School at Carnegie Mellon University is ranked No. 6 for part-time MBA and No. 16 for best business schools.
Ivy League schools do not include Carnegie Mellon. It is one among the numerous New Ivies, a term introduced by Newsweek in 2006. Despite not having the same exclusive prestige as Ivy League colleges, the private and public US schools that make up The New Ivies are equally remarkable in terms of academics and faculty.
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if the irr of machine c is 12.5% and the irr of machine d is 11%, then it is correct to conclude that machine c is more profitable than machine d.
It is true that if IRR of the machine c is 12.5% and IRR of the machine d is 11%, then it is correct to conclude that machine c is more profitable than machine d.
What is IRR?The formula known as IRR is used to calculate the rate of return on an investment. The term "internal" refers to the absence of external factors from the computation, such as the risk-free rate, inflation, the cost of capital, or financial risk. The procedure can be applied ex-ante as well as ex-post. IRR is an ex-ante forecast of future annual rate of return. When employed ex post, it calculates the actual investment return that was made on a past investment after the fact. Yield rate and discounted cash flow rate of return are some other names for it (DCFROR). The "annualized effective compounded return rate," or rate of return that sets the net present value of all cash flows from the investment at zero, is what is meant by the term "internal rate of return" when referring to a project or investment.
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if a depositor puts $100 in a bank account that earns 4 percent interest compounded annually, how much will be in the account after five years?
The amount will be $122, considering the amount of principal and rate of interest using the formula of compound interest.
Given information:
Principal amount = $100
Interest rate (i) = 4% = 0.04
Time period = 5 years
Amount using formula of compound interest,
Amount = $100(1+0.04) ^5 =$122
The interest earned on savings that is computed using both the original principal and the accrued interest over time is known as compound interest. The interest earned on savings that's also computed considering the both original principal and the interest accrued over time is known as compound interest. The yearly interest rate is increased to the amount of compounded periods minus one, and the starting principal is multiplied by these two factors. The obtained value is subsequently deducted from the loan's entire original amount.
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pharoah company purchases a patent for $242,000 on january 2, 2022. its estimated useful life is 11 years. (a) prepare the journal entry to record amortization expense for the first year
The entry is displayed below:
Amortization expense - Patent A/c Dr $22,000
To Patent A/c $22,000
(As a result, the first year's amortization expense is recorded.)
What is an expense for amortization?The cost of long-term assets (such computers and automobiles) over the course of their use is taken into account by amortization charges. They are listed on an organization's income statement and are also known as depreciation expenses.
Is patent amortization a cost of doing business?Companies can use amortization accounting to deduct a specific percentage of a patent's value as an operational expense each year until the patent expires and is worthless.
Patents and trademarks are examples of intangible assets that are amortized into an expense category called amortization. Depreciation is used to write off tangible assets instead.
The calculation is displayed below.
= Patent's Purchase cost ÷ estimated useful life
= $242,000 ÷ 11 years
= $22,000
The amortization expense, not the depreciation expense, is taken into account for intangible assets, and the same is required.
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suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. these wastes flow downstream into a lake that has become thick with algae and polluted by the minerals in the waste matter. the local office of a nonprofit environmental organization collects enough donations to fund a campaign to stop the farm's pollution.
The following types of private solutions to the externality of pollution has occurred in this case is Charities. It’s important to note that sometimes private solutions to externalities do not work co-ordinating negotiating among all of the parties too costly.
Charity is generally can be defined as “made actual” – it makes a real difference by the act of giving help to those in need of it.
Pollution is generally can be defined as unwanted physical or chemical materials in an area that give negatively impacts to the environment. This is caused by waste materials, which can be solid, gas, liquid or any other form of pollution. Pollution can cause adverse effects on the environment and have significant consequences. Pollution can also refer to excessive human activity, such as noise and light pollution, or to specific pollutants such as radioactive or plastic material.
The question is incomplete, the complete question is:
Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted due to the minerals in the waste matter. The local office of a nonprofit environmental organization collects enough donations to stop the farm's pollution.Which of the following types of private solutions to the externality of pollution has occurred in this case?a. (Contacts, moral codes and social sanctions, integration of different types of businesses through merger or acquisition)b. It’s important to note that sometimes private solutions to externalities do not work. For example, this occurs when the number of parties involved is so large that it makes...(government action the only viable solution, the market failure from the externality unimportant, coordinating negotiations among all of the parties too costly)
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why is the accrual-based income statement superior to a cash-based income statements in measuring profitability? (select all that apply.)
Accrual based provides a better representation of income statement, it shows the exact expense occurred in a period as compared to when the cash was paid, and it shows the correct profitability position of the company.
What is Income Statement?Income statement is the statement that is prepared by the company that shows the revenue, expenses and profitability of the company. The transactions are posted in the form of journal entries, then income statement is prepared.
Accrual based income statement is superior to a cash based income statement because this represents the actual revenue, expenses and profitability of the company at a given period. This does not takes into account the receipts of cash, instead it is focused on the accrual basis.
The missing part of the question is:
It reflects well the operating activities of the business and the best measure of a company’s profitability during the period.
It reports the expenses incurred in generating the revenues regardless of when the cash was paid.
It reports the revenues generated regardless of when the cash was collected.
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Explain why apprenticeships can be a great option for people seeking an alternative to the traditional, 4-year college route.
You'll receive immediately applicable job experience through an apprenticeship, which has several advantages over traditional classroom learning.
What are apprenticeships?Straightaway entry into the industry gives you the chance to establish yourself inside a company and acquire industry-specific skills.
After high school, students can pick an apprenticeship as their career option. There are further postsecondary options, such as college, university, or the workforce.
Therefore, access to well-paying occupations that require a high degree of ability, is made possible via apprenticeship training.
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when a buyer-seller relationship has reached the stage of partnership development, there is a stated or implied pledge to continue the relationship.A. culminationB. pinnacleC. commitmentD. expansionE. covenant
When a buyer-seller relationship has reached the Commitment stage of partnership development, there is a stated or implied pledge to continue the relationship.
What is meant by buyer seller relationship?The dedication and trust between the buyer and the supplier serve as the fundamental cornerstone of this kind of relationship. Maintaining a long-term, mutually beneficial partnership is the key goal here. When there are fewer options for choosing suppliers, buyers favor this form of connection.
Feedback and ideas can flow freely when suppliers and customers have a long-term connection. This will eventually result in a more efficient, streamlined supply chain that might improve costs and customer service.
The proper operation of the procurement department depends on communication between the customer and supplier. Each side benefits from clear, two-way communication that is based on mutual respect and understanding of the other party's business needs.
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What were the requirements ask for the approval of their loans?.
Banks look at your CIBIL Score and Report whenever you apply for a loan to determine your creditworthiness and history. Your chances of getting approved for a loan are greater the higher your score. People with a high CIBIL Score are approved for 79% of loans and credit cards.
What is the most crucial requirement for obtaining a loan?
Verification of Income Income verification is one of the most crucial parts of your loan application. This is done so that the bank can assess your ability to pay and the risks associated with lending you money.
What is the typical CIBIL score?
The 'Accounts' and 'Enquiries' sections of your CIR are used to calculate your CIBIL score, which is between 300 and 900.A score above 700 is generally regarded as satisfactory.Information about the members' monthly or annual income (banks and financial institutions)
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What is borrowed money called?.
are the standards stating the amount salespersons should sell and how sales should be divided among the company's products.
Sales quotas are guidelines that specify how much should be sold by salespeople and how those sales should be distributed across the company's items.
A specified sales goal or target level for a sales team is referred to as a sales quota. Sales managers generally give teams or individual salespeople a deadline to complete these tasks. Additionally, they are frequently time-sensitive and scheduled to be completed on a monthly, quarterly, or annual basis.
There are various techniques to gauge your sales quota. This could be as general as the number of new clients, etc., or as particular as units sold. They are frequently measured in terms of profits, sales, or sales activity
Therefore, Sales quotas are objectives that outline how much should be split among the products of the company and how much should be sold by salespeople.
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you purchased three transport 16 call option contracts at a quoted price of $.11. what is your total profit on this investment if the price of transport is $15.75 on the option expiration date?
Total profit (sometimes known as net profit) is the amount of money that remains after deducting all business-related costs.
What is an example of total profit?
For instance, the gross profit would be $6,000 if a business had $10,000 in revenue and $4,000 in COGS. Your income statement includes this amount. You must be aware of the revenue and cost of items sold in order to calculate the gross profit. The whole amount you make from sales is your revenue.How can you subtract costs from total profits?
A company's profit is determined by the income it receives less the expenditures it incurs. Subtract costs from revenue to get the profit function.The profit function formula is what?
Let P(x) stand for the profit, R(x) for the revenue, and C(x) for the expense. Profit thus equals P(x) = R(x) -C. (x). The income and expense can be modelled as fixed numbers or as functions, it is vital to remember.To know more about profit, checkout this link:
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What are the top 3 best planning techniques and tools applied by successful entrepreneurs?.
Making an initial strategy, graphically organising thoughts, and being willing to keep going are the top three planning strategies used by successful entrepreneurs.
The instruments used by entrepreneurs are
1. Create a preliminary plan: One of the common errors made by first-time business owners is operating without one. Planning your finances can help with this. establishing the annual spending limit.
2. Visually organise your ideas: While the research process is crucial for widening your perspective, without organising, all you will have is a jumble of unconnected, loose ideas.
3. Refuse to give up: Entrepreneurship requires creativity, drive, and the determination to keep going even after failure.
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what benefits does customer relationship management software (crm) provide to an organization? more than one answer may be correct.
Customer Relationship Management Software (CRM) gives more insight about customers to the organization. It helps them to understand more about their customers information, problems and how to improve their services.
The benefit provided by Customer relationship management softwareIt helps to gather customers information: Track information e.g Contact, address, name,It increases productivity: It helps you to build and monitor sales productivity.Better Customer Service: It helps to render effective services to their customer.Manage communications and prospective leads: It helps to reach out to prospect and tracking interaction, marketing through mails, website etcIt makes administrative task efficient – Data accessibility, retention and satisfaction rates/In conclusion, Customer Relationship management software (CRMs) has a lot of benefit it offers to an organization
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To help managers make their employees' jobs more interesting and motivating, J. R. Hackman and G. R. Oldham developed a framework known as the job _______ model.
characteristics
'To help managers make their employees' jobs more interesting and motivating, J. R. Hackman and G. R. Oldham developed a framework known as the job characteristics model.
An employee is a person who is paid to work for an individual or company. A worker does not have to work full time to be considered an employee. You just need to be paid for your work by your employer (the person or company that pays your salary).
Employees, also known as employers, are people employed by an individual or company to perform work for the individual or company. The IRS says people are considered employees if their employer has control over the work done.
An example of an employee is a store clerk. Employees are required to perform specific tasks such as: B. An employee is considered an employee if they wear a name tag and greet customers with certain expressions.
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A company in an industry where there is little pressure for efficiency and where variations in country markets is significant would choose a ________ international strategya. globalb. transnationalc. centralized single countryd. Multidomesticd. Multidomestic
A company in an industry with little efficiency pressure and where there are significant differences between country markets would opt for a global international strategy.
The phrase global strategy refers to three different categories: global, multinational, and international strategies. In essence, these three tactics help an organisation accomplish its goal of global expansion. It is helpful to distinguish between three types of worldwide expansion that result from a company's resources, capabilities, and current international position while formulating "global strategy." The company's strategies outside of its native markets can be viewed as international if it is still primarily focused on those markets. A dairy business might, for instance, sell some of its extra milk and cheese supplies outside of its home nation. But the domestic market continues to be its primary strategic focus.
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Pennsylvania Refining Company is studying the relationship between the pump price of gasoline and the number of gallons sold. For a sample of 20 stations last Tuesday, the correlation was 0.78. Can the company conclude that the correlation is positive?
1. State the decision rule for 0.01 significance level. (Round your answer to 3 decimal places.)
Compute the value of the test statistic. (Round your answer to 3 decimal places.)
Can we conclude that the correlation in the population is greater than zero? Use the 0.01 significance level.
The population proportion is greater than zero
The claim about the population correlation coefficient is tested under the null and the alternative hypothesis at the 1% level of significance. The sampling test statistic, t-test statistic with (n-2) degree of freedom is used to test the claim under the one-tailed test.
Sample size, n = 20
Sample proportion, r = 0.78
Null hypothesis: H_0:\rho = 0
Alternative hypothesis: H_a: \rho > 0
The test statistic is calculated as:
[tex]{eq}t = \dfrac{r\sqrt{n-2}}{\sqrt{1-r^2}} \sim t_{n-2} {/eq}[/tex]
Now,
[tex]{eq}t = \dfrac{0.78\sqrt{20-2}}{\sqrt{1-0.78^2}}\\ t = 5.288 {/eq}[/tex]
Excel function for the P-value:
=TDIST(5.288,18,2)
P-value approx 0.00
The P-value is less than the 1% level of significance. We reject the null hypothesis at the 1% level of significance. We can conclude that the population proportion is greater than zero.
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what is another name for the milling or pulping stage in cider production where fruit is being grind to a pulp?
When fruit is ground to a pulp during the milling or pulping stage of making cider, the process is known as scratting.
What is the name of the method used to produce hard cider?Making hard cider is a basic technique that is easy to understand. Start the fermentation process by combining apple juice and yeast in a container. The yeast turns the juice's sugar into alcohol and gas during fermentation.
How are apples prepared for cider?Apples need to be cored, chopped, and processed in a food processor, blender, or food chopper. Squeeze the juice out of the crushed apple pulp using a clean muslin bag or jelly bag. Pasteurize the juice by boiling it to at least 160 degrees Fahrenheit if you want to consume it right away rather than creating cider.
What occurs to apple pulp once it is made into cider?The apple pulp is moved to the press after it has been pulped, where "the cheese" is built up using a cloth and rack system before being crushed using an old, manually driven screw press to produce the juice. The juice is examined once it has been extracted for its various constituents.
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determine which statement below regarding economic indicators is false. retail sales measure the current outlook for the economy. consumer confidence can be volatile and inconsistent over time. building permits are an example of leading indicators. cpi measures inflation from the perspective of a consumer.
Retail sales measure the current outlook for the economy. Option A.
A macroeconomic indicator is a statistic or measurement that reflects the economic conditions of a particular country region or sector. Analysts and governments use it to assess the current and future health of the economy and financial markets.
Increased consumer spending will help keep the economy expanding. If consumer confidence declines for any reason, consumers become more uncertain about their financial prospects and start spending less. This affects companies when they start to see a drop in sales. Some of the factors that affect consumer confidence are changes in housing prices unemployment and inflation.
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as the price level falls, people feel as if they have more money, so they spend more, which influences which of the following, in economic terms? interest rate effect aggregate demand aggregate supply exchange rate effect
As the price level falls people feel as if they have more money, so they spend more, this event influences the Aggregate Demand.
Aggregate demand shows the total amount of money people willing to spend to purchase some amount of goods and services at a specific price level and point in time.
As the price level falls, people feel as if they have more money. This condition is called as The Wealth Effect. People will feel that they become reacher even if their income is actually the same as before.
The Wealt Effect is responsible to shift the aggregate demand because:
People tends to increase their consumption as they have more money to spend. People will try to shift some of their usual commodities to the "higher-class" commodities because they feel those exclusive goods and services are no longer expensive.Learn more about Aggregate Demand and Wealth Effect here: https://brainly.com/question/27992948
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