As Accounts Manager in Your Company, You Classify 75% of Your

question 24

Multiple Choice

As accounts manager in your company, you classify 75% of your customers as "good credit" and the rest as "risky credit" depending on their credit rating. Customers in the
"risky" category allow their accounts to go overdue 50% of the time on average, whereas
Those in the "good" category allow their accounts to become overdue only 10% of the
Time. What percentage of overdue accounts are held by customers in the "risky credit"
Category?

• A) 20%
• B) 12.5%
• C) 93.75%
• D) 62.5%

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Definitions:

Natural Rate

The level of economic activity, particularly unemployment or interest rates, that corresponds to the economy's long-term equilibrium without short-term cyclical fluctuations.

Potential Output

Potential output is the maximum amount of goods and services an economy can produce when it is most efficient and fully employed, without causing inflation.

Expansionary Gap

A situation where real GDP exceeds potential GDP, often leading to inflationary pressures due to high demand in an economy.

Equilibrium Output

The level of output where the quantity of goods and services produced equals the quantity of goods and services demanded.