Which of the Following Policies Would Increase a Firm's Current

question 22

Multiple Choice

Which of the following policies would increase a firm's current inventory turnover ratio?

• A)Reduction of the average inventory that supports a constant amount of sales
• B)An decrease in the units of inventory sold while holding average inventory constant
• C)Increase of inventory by adopting a Just-in-Time production schedule
• D)Accelerating purchases of inventory to the current year

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Definitions:

Aggregate Demand

The total demand for all goods and services within an economy at various price levels, in a given time period.

Automatic Stabilizer

Economic policies and programs, such as unemployment benefits and taxation, that automatically adjust to counteract economic fluctuations without direct intervention by policymakers.

Crowding-out

A situation where increased public sector spending leads to a reduction in private sector spending.

Accelerator Effect

Refers to the phenomenon where an increase in national income results in a proportionally larger increase in investment spending due to expected higher demand for products.