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Show the Effect of an Increase in (Autonomous) Investment on an IS-LM

question 8

Essay

Show the effect of an increase in (autonomous) investment on an IS-LM graph (in the short run).


Definitions:

Finished Goods Inventory

The stock of completed products ready for sale but not yet sold.

Raw Materials Inventory

The materials and supplies that a company holds in stock that are necessary for its manufacturing process.

Budgeted Sales

The projected or forecasted amount of sales in units or revenue that a company plans to achieve in a specific period, used for planning and control purposes.

Credit Sales

Credit sales refer to transactions where the customer purchases goods or services with an agreement to pay at a later date, typically extending credit from the seller to the buyer.

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