What Is the Difference Between a Change in Aggregate Supply

question 30

Multiple Choice

What is the difference between a change in aggregate supply and a change in aggregate output supplied?

• A) A change in aggregate supply is represented by a movement along the aggregate supply curve in response to a price change, while a change in aggregate output supplied is represented by a shift of the aggregate supply curve in response to a change in a determinant of aggregate supply other than the price level.
• B) A change in aggregate supply is represented by a shift of the aggregate supply curve in response to a change in the actual price level, while a change in aggregate output supplied is represented by a movement along the aggregate supply curve in response to a change in the expected price level.
• C) A change in aggregate supply is represented by a shift of the aggregate supply curve in response to a change in a determinant of aggregate supply other than the price level, while a change in aggregate output supplied is represented by a movement along the aggregate supply curve in response to a change in the price level.
• D) There is no difference between the two terms.

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Definitions:

Bonds

Long-term debt securities issued by corporations or government entities that pay periodic interest until maturity, at which point the face value is repaid.

Bond Premium

The extra amount by which a bond's market price exceeds its face value.

Annual Interest Expense

The total amount of interest payments a company owes over the course of a year on any borrowed funds.

Premium On Bonds Payable

The excess amount by which bonds are sold over their face value, indicating investors’ willingness to pay more for certain bonds.