A Decrease in Unplanned Inventory Investment for the Entire Economy

question 75

Multiple Choice

A decrease in unplanned inventory investment for the entire economy equals the excess of

• A)output over aggregate supply.
• B)output over aggregate demand.
• C)aggregate supply over output.
• D)aggregate demand over output.

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Definitions:

Safety Stocks

Additional quantities of stock kept in inventory to reduce the risk of stockouts caused by variations in supply or demand.

Average Inventory

Average Inventory is a calculation used to estimate the value or quantity of inventory that a business holds over a specific period, often used for analyzing inventory efficiency.

Net Present Value

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

Cash Sales Policy

A cash sales policy is a company's strategy to require payment for goods or services at the time of sale, which can improve cash flow and reduce credit risk.