If an Economy Has a Volatile In?ation Rate

question 68

Multiple Choice

If an economy has a volatile in?ation rate:

• A) uncertainty will increase making investment decisions di?cult.
• B) net exports will rise since goods will be imported from other countries.
• C) the business cycle will be relatively stable.
• D) the government will pursue policies to shift aggregate supply to the left.

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Definitions:

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects cash from its credit sales by calculating the number of times average accounts receivable are collected during a period.

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a period.

Days' Sales Uncollected

A financial metric that measures the average number of days it takes a company to collect payment after a sale has been made.

Days' Sales In Inventory

A financial metric that estimates how many days it will take to sell the entire inventory, indicating the liquidity of inventory.