Which of the Following Is Evidence of an Inflationary Gap

question 119

Multiple Choice

Which of the following is evidence of an inflationary gap?

• A)very long lines at employment agencies 
• B)very short waiting times for product delivery 
• C)very low sales figures 
• D)very long search times for people looking for jobs 
• E)very low unemployment rates

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Definitions:

Operating Cycle

The duration between a company's purchase of inventory and the receipt of cash from accounts receivable.

Accounts Receivable Period

The average number of days it takes for a business to receive payments owed by its customers for goods or services provided.

Inventory Period

The average time that inventory is held before it is sold or used in production.

Operating Cycle

Refers to the duration it takes for a company to buy goods or services, convert them into products, sell those products, and collect cash from the sales.