Consider the Economy's Aggregate Supply Curve

question 8

Multiple Choice

Consider the economy's aggregate supply curve.Other things being equal,firms' unit costs will tend to fall if

• A)there is a rise in the price of oil.
• B)the government increases payroll taxes.
• C)wages fall.
• D)wage and price controls are in effect.
• E)wage increases are less than productivity increases.

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Definitions:

Weak Form Efficiency

Refers to a theory in financial economics that suggests all past market prices and data are fully reflected in current stock prices, implying that past price movements cannot predict future stock prices accurately.

Higher Returns

The potential for gaining more profit or income from an investment compared to other options.

Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.