B. Decreases
if demand goes down, nobody is buying anything, so the need to produce/manufacture is down
<span><span> The purpose of the analysis is not sufficiently clear, so analysts produce data that doesn’t shed any light on what act</span></span>
Question:
For an economy starting at potential output, a decrease in autonomous expenditure in the short-run results in a(n):
A. increase in potential output
B. recessionary output gap
C. decrease in potential output
D. expansionary output gap
Answer:
The correct answer is B
Explanation:
A decrease in autonomous expenditure shifts the Planned Aggregate Expenditure curve downward thus creating a lower equilibrium output.
PAE = C + Ip + G + NX
where
PAE = Planned Aggregate Expenditure
C = consumption
Ip = Investment Spending
G = Government Spending
NX = Net Export
If an economy has its output equal to its potential, this will create a reduction in short-run equilibrium output leading to a recessionary output gap.
Cheers!
He saves Rs. 67.5 (take 450 times .85- since its a % and then subtract that from 450)
Answer:
Purchases= 17,200 pounds
Explanation:
Giving the following information:
Production in units:
Month 1= 16,000 units
Month 2= 22,000 units
One pound of materials is required for each finished unit.
The inventory of materials at the end of each month should equal 20% of the following month's production needs.
Beginning inventory= 3,200 lbs.
To calculate the direct material required, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 16,000 + 22,000*0.2 - 3,200
Purchases= 17,200 pounds
