Which of the Following Is Occurring as the Macro Economy

question 107

Multiple Choice

Which of the following is occurring as the macro economy is adjusting from the short run to the long run?

• A)Wages and other factor prices are adjusting to close output gaps.
• B)Potential output is adjusting to close inflationary or recessionary gaps.
• C)Wages and other factor prices remain constant.
• D)Aggregate demand shocks are causing deviations from potential output.
• E)Aggregate supply shocks are causing deviations from potential output.

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Definitions:

Conversion Cost

The total cost of converting raw materials into finished goods, generally comprising labor and overhead expenses.

Materials Cost

The expense incurred to obtain materials required for the production of goods or services.

FIFO Process Cost Method

A method of inventory costing that assumes the first units produced or purchased are the first ones used or sold, standing for "First-In, First-Out."

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to customers.