In Which of the Following Sets of Circumstances Can We

question 11

Multiple Choice

In which of the following sets of circumstances can we confidently expect inflation?

• A)Aggregate supply and aggregate demand both increase.
• B)Aggregate supply and aggregate demand both decrease.
• C)Aggregate supply decreases and aggregate demand increases.
• D)Aggregate supply increases and aggregate demand decreases.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Income Recognition

The accounting principle that revenue should only be recognized after the business has fulfilled its obligations and the payment is certain.

Direct Method

A method for creating a cash flow statement where actual cash flow information from operations is used rather than adjustments to net income.

Operating Cash Receipts

Cash received by a company from its core business operations.