Refer to the Following Figure to Answer the Following Questions

question 154

Multiple Choice

Refer to the following figure to answer the following questions.
-According to the figure,and assuming the marginal propensity to consume is 0.75,to shift aggregate demand enough to be back at long-run equilibrium,the government would have to increase government spending by

• A) $20 billion.
• B) $10 billion.
• C) $5 billion.
• D) $1 billion.
• E) $500 million.

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Definitions:

Net Working Capital

Current assets minus current liabilities.

Current Ratio

A financial metric that assesses a firm's capacity to meet immediate liabilities using its current assets.

Cash Conversion Cycle

A metric that shows the time span between a company's outlay of cash and its collection of receivables; a measure of liquidity.

Trade Credit

Credit extended by a seller to a buyer allowing the latter to purchase goods or services immediately and pay for them at a later date.