Suppose That Output in an Economy Is 50 Units and the Number

question 147

Multiple Choice

Suppose that output in an economy is 50 units and the number of hours worked in the economy is 25. If the economy enters a recession, which of the following combinations of output and hours worked would best reflect the recession?

• A) 50 units of output and 25 hours worked
• B) 40 units of output and 20 hours worked
• C) 25 units of output and 10 hours worked
• D) 30 units of output and 20 hours worked

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Definitions:

Inventory Turnover Ratio

A measure of how quickly a company sells its inventory within a given period, calculated by dividing the cost of goods sold by the average inventory.

Credit Sales

Sales made by a business allowing the customer to pay at a later date, often tracked through accounts receivable.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.

Short-Term Note Payable

A debt obligation due within one year or within the normal operating cycle of the business, used to finance short-term financing needs.