Macro Equilibrium Is Established at Which Price Level,given AD₁ and AS₁

question 48

Multiple Choice

Macro equilibrium is established at which price level,given AD₁ and AS₁ in Figure 8.3?

• A)P₁.
• B)P₂.
• C)P₃.
• D)P₄.

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Definitions:

Minimum Cash Balance

Minimum cash balance is the lowest amount of cash a company aims to maintain in its accounts to ensure operational liquidity.

Average Collection Period

Measures the time, on average, it takes for a company to receive payments owed by its customers, indicating the efficiency of its credit and collection policies.

Cumulative Surplus

The total accumulated amount of profits, after all expenses and dividends are paid, that a company has at its disposal for reinvestment or distribution.

Minimum Cash Balance

The smallest amount of cash that a company seeks to maintain in its accounts to ensure financial stability and operational efficiency.