When an Economy Is in a Recession

question 86

Multiple Choice

When an economy is in a recession,

• A)strong demand for investment funds will push interest rates upward.
• B)strong demand for resources will push the prices of resources upward.
• C)weak demand for investment funds will cause the real interest rate to decline.
• D)the unemployment rate will be less than its natural rate.

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Definitions:

Master Budget

A comprehensive financial planning document that consolidates all of a company's individual budgets relating to sales, cost of goods sold, operations, and capital expenditures into one overarching budget.

Sales Budget

A financial plan that estimates the expected sales revenue for a period, including units sold and revenue expected.

Cash Budget

A cash budget is a financial plan or forecast that outlines expected cash inflows and outflows over a specific period, helping businesses manage their cash flow.

Purchases Budget

A financial plan that estimates the amount of goods or inventory a business needs to buy over a certain period to meet its sales goals.