Use the Following to Answer Questions

question 87

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Expenditures and Real GDP 1
-(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Suppose AE = C + I_P, and I_P is autonomous. What is the value of AE when Y = $12,000 billion?

• A) $6,000 billion
• B) $9,000 billion
• C) $12,000 billion
• D) $15,000 billion

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Definitions:

Inventory Management

The practice of ordering, storing, tracking, and controlling inventory to ensure an adequate supply without excessive oversupply or loss.

Just-In-Time Approach

A production strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs by receiving goods only as they are needed in the production process.

Cash Cycle

The period of time it takes for a company to convert its investments in inventory back into cash, reflecting how efficiently a company manages its assets.