In the New Keynesian Model, an Increase in Current Total

question 42

Multiple Choice

In the New Keynesian model, an increase in current total factor productivity

• A) shifts output supply right and opens a negative output gap.
• B) shifts output demand right and opens a positive output gap.
• C) shifts output demand left and opens a negative output gap.
• D) shifts output supply left and opens a negative output gap.
• E) shifts output supply right and opens a positive output gap.

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Definitions:

Inventory Period

The average time it takes for inventory to be sold and replaced over a period, indicating the efficiency of a company's inventory management.

Credit Sales

Sales in which the customer is allowed to pay at a later time, typically generating accounts receivable on the balance sheet.

COGS

Cost of Goods Sold; the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Payables Turnover Rate

A financial ratio indicating how efficiently a company pays its suppliers, calculated by dividing total purchases by average accounts payable.