As a Result of an Increase in Government Spending

question 39

Multiple Choice

As a result of an increase in government spending:

• A) there will be an increase in aggregate quantity demanded.
• B) there will be a decrease in aggregate quantity demanded.
• C) there will be an increase in aggregate demand.
• D) there will be a decrease in aggregate demand.

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Definitions:

Credit Sales

Sales made by a business where the payment is delayed, typically documented with an invoice and recorded in accounts receivable.

Receivables Financing

A type of financing where a company uses its accounts receivable as collateral to secure short-term financing, improving liquidity.

Operating Cycle

The time period between the acquisition of inventory by a business and the collection of cash from accounts receivable.

Inventory

The total amount of goods or materials held by a company for the purpose of resale or production.