If the Favorable Supply Shocks of the 1990s Were Reversed

question 190

Multiple Choice

If the favorable supply shocks of the 1990s were reversed in the future, we should expect a(n)

• A)increase in inflation and unemployment.
• B)decrease in inflation and unemployment.
• C)increase in inflation and a decrease in unemployment.
• D)decrease in inflation and an increase in unemployment.

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Definitions:

Opportunity Costs

The loss of potential gains from other alternatives when one alternative is chosen.

Target Cash Balance

The optimal amount of cash a company sets as a goal to maintain for operational and contingency needs.

Lockboxes

Special post office boxes set up to intercept and speed up accounts receivable payments.

Accounts Receivable

The sum of money that customers owe to a company for products or services that have been provided but not yet compensated for.