If Your Company Had an Annual Purchase Cost of Items

question 30

Multiple Choice

If your company had an annual purchase cost of items equal to $2,000,000,an annual holding cost of $150,000 and an annual ordering cost of $750,000 this scenario would reveal that:

• A)Your fixed lot size was lower than the EOQ
• B)Your fixed lot size was equal to the EOQ
• C)Your fixed lot size was higher than the EOQ
• D)Nothing because there is insufficient information to discern where the EOQ would be.

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Definitions:

Supply-siders

Supply-siders are economists or policymakers who believe that reducing tax rates and regulatory barriers to production and investment can stimulate supply, leading to economic growth.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing and able to produce at different price levels during a specific time period.

Automatic Stabilizers

Changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action

Budget Deficit

A situation where a government's expenditures exceed its revenues over a specific period of time.