Exhibit 9-6 Keynesian Aggregate-Expenditure Model When the MPC Is 2\3

question 175

Multiple Choice

Exhibit 9-6 Keynesian aggregate-expenditure model when the MPC is 2\3 In Exhibit 9-6, the spending multiplier for this economy is equal to:

• A)1 2\3.
• B)2 1\2.
• C)3.
• D)5.

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Definitions:

Average Collection Period

The average number of days it takes for a company to receive payment from its customers for invoices issued.

Inventory Turnover

A measure of how often a company sells and replaces its stock of goods within a certain period.

Average Sale Period

The average amount of time it takes for a company to convert its inventory into sales.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell the goods, and receive cash from sales.