Which of the Following Is True When an Economy Produces

question 30

Multiple Choice

Which of the following is true when an economy produces at full employment,but consumers,government,businesses,and the foreign sector do not buy all the output?

• A)Inventories are depleted.
• B)There is a recessionary gap.
• C)Unemployment falls.
• D)The price level rises.

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Definitions:

Cost Of Goods Sold

Expenses directly related to manufacturing goods a company sells, including labor and materials.

Oldest Purchases

This term signifies inventory items that were bought first and are typically considered for cost calculation under the First-In, First-Out (FIFO) inventory method.

Retail Inventory Method

A method of estimating inventory cost that is based on the relationship of cost to retail price.

Cost To Retail Ratio

Cost To Retail Ratio is a method used to estimate the inventory value by comparing the cost of goods available for sale to the retail price of the goods.