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Spontaneous Recovery

question 65

Multiple Choice

Spontaneous recovery:

Understand the concept of maintaining a minimum cash balance and its impact on financing decisions.
Understand the differences between Keynesian and classical economic theories.
Recognize the concept of equilibrium GDP and its relation to full employment according to Keynes and the classicals.
Identify Say's Law and its significance in classical economics.

Definitions:

Cash Flow

The net amount of cash being transferred into and out of a business during a specific period.

Cash Flow from Operations

This reflects the cash that a company generates from its regular business activities, excluding long-term capital and investment costs.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the short term liquidity of a company.

Net Capital Spending

This refers to the amount spent by a company on acquiring or maintaining fixed assets, such as equipment or buildings, after accounting for depreciation.

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