Which of the Following Causes an Increase in Short-Run Aggregate

question 4

Multiple Choice

Which of the following causes an increase in short-run aggregate supply?

• A) The price level increases.
• B) The price level decreases.
• C) Firms and workers expect the price level to fall.
• D) Firms and workers expect the price level to rise.
• E) There are fewer workers in the labor force.

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Definitions:

Casting Department

A functional area in a manufacturing facility where materials are poured into molds to form parts or products.

Finishing Department

The final stage in the manufacturing process where products are completed, assembled, painted, or treated before sale.

Predetermined Overhead Rate

A rate calculated at the beginning of a period, used to allocate manufacturing overhead to products based on a particular activity base, such as machine hours or labor hours.

Machine-Hours

A measure of production output or activity based on the hours that machinery is operational.