Which of the Following Is Evidence of an Inflationary Gap

question 207

Multiple Choice

Which of the following is evidence of an inflationary gap?

• A)Very long lines at employment agencies
• B)Very short waiting times for product delivery
• C)Very low sales figures
• D)Very long search times for people looking for jobs
• E)Very low unemployment rates

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Definitions:

Net Present Value

The difference between the present value of cash inflows and outflows over a period, used to assess the profitability of an investment.

Working Capital

The disparity between a business's immediate assets and liabilities, showcasing its liquidity and financial stability in the short-term.

Salvage Value

The estimated resale value of an asset at the end of its useful life, considered in depreciation calculations and asset disposal decisions.

Net Present Value

The sum of all future cash flows, both incoming and outgoing, of an investment, discounted back to their present value to analyze its profitability.