A Firm's Planned Purchases for a Given Month Are $70,000

question 65

True/False

A firm's planned purchases for a given month are $70,000 and its purchase commitments are $10,000.If its merchandise costs as a percent of selling price are .70,its open-to-buy at cost is $4,200.

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Definitions:

Aggregate Production

The total amount of goods and services produced within an economy at a given overall price level in a given period.

Aggregate Purchases

The total amount spent by consumers, businesses, and the government on goods and services within a particular period.

Unintended Inventory Investment

Occurs when a business accumulates more inventory than planned due to unexpected changes in demand or production levels.

Keynesian Theory

An economic theory positing that government intervention through fiscal policy can affect the level of economic activity and mitigate the effects of recessions.