What Is the Expression for Planned Aggregate Expenditures for an Open

question 29

Essay

What is the expression for planned aggregate expenditures for an open economy? Briefly explain why and how this is different from the expression of planned aggregate expenditures for a closed economy.

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Definitions:

Allowance for Doubtful Accounts

An accounting provision representing the estimate of uncollectable accounts receivable.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Accounts Receivable Turnover

The relationship between net sales and accounts receivable, computed by dividing the net sales by the average net accounts receivable; measures how frequently during the year the accounts receivable are being converted to cash.

Receivable

An amount of money owed to a firm by its customers as a result of the firm extending credit to them.