Consider the Basic AD/AS Model in the Short Run

question 5

Multiple Choice

Consider the basic AD/AS model in the short run.When there is a change in autonomous desired expenditure,the simple multiplier is equal to the

• A)product of the horizontal shift of the AD curve times the change in autonomous expenditure.
• B)product of the vertical movement along the AD curve times the change in autonomous expenditure.
• C)ratio of the horizontal shift of the AD curve to the change in autonomous expenditure.
• D)ratio of the vertical movement along the AD curve to the change in autonomous expenditure.
• E)ratio of the vertical shift of the AD curve to the change in autonomous expenditure.

Understand the principles and applications of explanatory or causal models in forecasting.

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Understand and calculate work in process inventory based on given days' sales.

Understand the lean business model and its application beyond manufacturing.