A Larger Than Expected Increase in Aggregate Demand Will Lead

question 54

Multiple Choice

A larger than expected increase in aggregate demand will lead to __________in the __________of the business cycle.

• A) an expansion; real business cycle theory
• B) a recession; new Keynesian cycle theory
• C) a recession; Keynesian cycle theory
• D) an expansion; new classical cycle theory

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Definitions:

Short-term Debt

Debt obligations, typically due within one year, that are used for financing immediate operational needs of a business.

Working Capital Financing

This refers to short-term loans or credit facilities used by a company to finance its daily operations and manage its current assets and liabilities.

Accounts Payable

Short-term liabilities of a company, representing amounts owed to vendors or suppliers for goods and services received but not yet paid for.

CCC

Refers to the Cash Conversion Cycle, a metric that gauges how efficiently a company manages its inventory, receivables, and payables to generate cash.