Consider the AD/AS Macro Model

question 51

Multiple Choice

Consider the AD/AS macro model.The main source of increases in material living standards over the long term is the

• A)maintenance of a continuous inflationary gap.
• B)continual avoidance of recessionary gaps.
• C)continuous outward shift of aggregate demand.
• D)continual increase in potential national income.
• E)positive slope of the aggregate supply curve.

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Definitions:

Accounts Payable

The amount of money a company owes to its suppliers or creditors for goods and services purchased on credit.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the business.

Cost of Trade Credit

The effective interest rate associated with taking discounts offered by suppliers for early payment or the cost of forgoing those discounts.

Net 30

A payment term indicating that full payment is due within 30 days of the invoice date.