Which of the Following Is FALSE

question 18

Multiple Choice

Which of the following is FALSE?

• A)the AS-curve is horizontal in the Keynesian case
• B)the AS-curve is vertical in the classical case
• C)the AS-curve is upward sloping in the medium run
• D)the AS-curve is more price elastic in the long run than in the short run
• E)none of the above

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Definitions:

Net Operating Income

The profit generated from a business's operations after subtracting operating expenses, but before interest and taxes.

Degree Of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to a change in its sales volume.

Variable Expenses

Expenses that change in proportion to the activity of a business, such as raw material costs or sales commissions.

Fixed Expenses

Expenses that remain constant regardless of production or sales volume, including rent, insurance, and salaries.