Building Blocks Has a Beginning Cash Balance for the Quarter

question 226

Multiple Choice

Building Blocks has a beginning cash balance for the quarter of $800. The firm's president requires a minimum cash balance of $800 be maintained at all times. Further, the president has a policy of
Borrowing when necessary to maintain that balance. If funds have been borrowed, then the
President requires they be repaid as soon as excess funds are available. How much will the firm
Borrow or repay this quarter if the quarterly receipts are $2,565 and the quarterly disbursements
Are $2,607?

• A) Borrow $42.
• B) Borrow $38.
• C) Neither borrow nor repay.
• D) Repay $38.
• E) Repay $42.

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Definitions:

Aggregate Demand Curve

Describes the buying behavior of a group of consumers. We add up all the individual demand curves to get an aggregate demand curve (the relationship between the price and the number of purchases made by a group of consumers).

Total Demand

Represents the entire quantity of a certain product or service that consumers in a market are willing and able to purchase at a given price level.

Market

A physical or virtual space where buyers and sellers interact to exchange goods, services, or information.

Highest Willingness to Pay

The maximum amount an individual is prepared to spend to obtain a good, service, or outcome, reflecting the perceived value.