Suppose the Economy Is Initially at Point a in the Diagram

question 133

Multiple Choice

Suppose the economy is initially at point A in the diagram below,and oil prices suddenly fall.Which point best depicts where the economy will end up in the short run?

• A)C
• B)E
• C)D
• D)A

---

Definitions:

Accounts Receivable Period

The average number of days it takes for a business to receive payments owed by its customers for goods or services provided on credit.

Inventory Period

The inventory period is the amount of time it takes for a company to sell through its stock of goods. This is a critical component of inventory management and cash flow analysis.

Accounts Payable Turnover

A financial metric that measures how fast a business pays its suppliers, calculated by dividing the total purchases by the average accounts payable during a period.

Cash Cycle

It refers to the time period between the disbursement of cash and the collection of receivables in a company's operational cycle.