Using the AS- AD Model, Which of the Following Would

question 47

Multiple Choice

Using the AS- AD model, which of the following would cause an increase in the natural level of output in the medium run?

• A) An increase in the money supply.
• B) An increase in government spending.
• C) A decrease in the oil price.
• D) An increase in the price target.
• E) A decrease in consumer confidence.

Comprehend that cash flow estimations are crucial in NPV despite being approximations.

Understand that the payback calculation does not consider the time value of money.

Identify the distinction between independent and mutually exclusive projects.

Recognize the limitations of using average accounting return (AAR) for project evaluation.

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Definitions:

Liquidity

A measure of how easily assets can be converted into cash without significant loss in value, important for meeting short-term obligations.

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Receivables Turnover

A financial ratio that measures how efficiently a company collects debt from its credit sales, calculated by dividing net credit sales by the average accounts receivable.

Inventory Turnover Ratio

A measure of how quickly a company sells its inventory within a given period, calculated by dividing the cost of goods sold by the average inventory.