An Inflationary Output Gap Would Generate Which of the Following

question 70

Multiple Choice

An inflationary output gap would generate which of the following conditions in the economy?

• A)There is an unusually small demand for labour.
• B)Workers have a relatively large amount of bargaining power with employers.
• C)Firms are making low profits.
• D)There is much idle capacity.
• E)There is downward pressure on wages.

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Definitions:

Accounts Receivable Turnover

A financial ratio indicating how quickly a company collects cash from credit sales, calculated over a given period.

Accounts Receivable

Accounts receivable represents the money owed to a company by its customers for goods or services delivered or used but not yet paid for.

Sales

The cumulative amount of money made by a business from selling its goods or services.

Average Collection Period

The average collection period is the average amount of time it takes for a business to receive payments owed by its customers for sales made on credit.