Classical Economists Assume That

question 12

Multiple Choice

Classical economists assume that

• A)Spending leakages exceed spending injections.
• B)Interest rate adjustment will cause business investment to equal consumer saving.
• C)The economy might experience persistent macro instability.
• D)No leakages would occur.

Understand the composition and importance of quick assets in financial analysis.

Grasp the concept and calculation of the cost of goods sold and its impact on a company's gross profit.

Learn about the inventory management processes including the calculation of merchandise available for sale.

Distinguish between periodic and perpetual inventory systems and their impact on inventory management.

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Definitions:

Inferior Good

A type of good for which demand decreases as the income of consumers increases, opposite of a normal good.

Normal Good

A good for which demand increases as the income of the consumer increases.

Price Elasticity

An indicator of the alteration in the amount of a product that is either demanded or supplied, as a result of variations in its market price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good which consumers are willing to purchase at various prices.