If the Economy Is Operating at an Output Level Beyond

question 58

Multiple Choice

If the economy is operating at an output level beyond its full-employment capacity, which of the following would most likely direct the economy back to long-run equilibrium?

• A) improvements in technology
• B) a decrease in the real rate of interest
• C) an increase in resource prices
• D) a decrease in resource prices

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Definitions:

Credit To Inventory

An accounting entry that increases the inventory asset account due to purchases on credit.

Perpetual Inventory System

An automated inventory management system which promptly registers inventory transactions during sales or purchases through digital point-of-sale systems and enterprise asset management software.

Purchases Returns

Transactions involving the return of goods previously bought to the supplier, often due to defects, inaccuracies, or other reasons, leading to a refund or credit note.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit and are due within a short period, typically less than a year.