Suppose GDP Is $20 Billion and the Desired Absorption Is

question 64

Multiple Choice

Suppose GDP is $20 billion and the desired absorption is $16 billion.What are the net exports?

• A)$10 billion
• B)$4 billion
• C)$36 billion
• D)$1 billion

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Definitions:

Economies of Scale

The cost advantage achieved by an increase in production volume that leads to a reduction in per-unit costs.

Cycle Inventory

The portion of inventory available due to the batching of orders, which rotates regularly and is used to meet consumer demand between replenishments.

Lot Size

The quantity of items that are processed or purchased at one time, affecting both inventory costs and manufacturing processes.

Ordering Costs

Expenses incurred in placing and processing orders for products, including administrative and operational costs.