In the Simple Aggregate Expenditure Model Where All Components of Aggregate

question 106

Multiple Choice

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, if the slope of the aggregate expenditures curve increases, the multiplier

• A) increases.
• B) decreases.
• C) remains constant.
• D) is undefined.

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Definitions:

Expected Sales

The projected amount of sales that a company anticipates to achieve within a specific period.

Average Collection Period

The average number of days it takes a company to receive payment after a sale has been made.

Operating Cycle

The period between the acquisition of inventory and the collection of receivable generated from sales, reflecting how long it takes for a business to convert its inventory into cash.

Cash Collections

The process of gathering and managing the cash received from customers or clients.