As an Expansionary Gap Is Closed in the Long Run

question 162

Multiple Choice

As an expansionary gap is closed in the long run by firms' actions,

• A)output decreases and the price level increases
• B)inflation decreases and unemployment rises
• C)both output and the price level increase
• D)both output and the price level decrease
• E)inflation rises and unemployment decreases

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Definitions:

Past-due Account

An account that has not been paid by the due date, indicating overdue payments.

Receivable

Amounts of money owed to a company by customers or clients for goods or services delivered but not yet paid for.

Average Collection Period

The average collection period is the average number of days it takes for a business to receive payments owed by its customers for sales made on credit.