Suppose the Equilibrium Level for an Economy Occurs When C

question 104

Multiple Choice

Suppose the equilibrium level for an economy occurs when C + I + G + X - M = $600.If the real national income is $500,then unplanned inventories are

• A)increasing,and output will expand.
• B)increasing,and output will contract.
• C)decreasing,and output will expand.
• D)decreasing,and output will contract.

---

Definitions:

Interest

The cost of borrowing money, typically expressed as a percentage of the sum borrowed, or the income earned from lending money.

Aging of Receivables

Aging of receivables is an accounting method used to estimate the amount of a company's accounts receivable that may not be collectible, represented in time categories based on the length of time the invoices have been outstanding.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of a company's receivables that may not be collected.

Bad Debt Expense

A ledger showing the value of invoices that a business anticipates it will not be able to receive payment for.