Which of the Following Explains Why We Assume That the Economy's

question 2

Multiple Choice

Which of the following explains why we assume that the economy's aggregate supply (AS) curve has a positive slope?

• A)Inputs become more expensive at higher levels of output.
• B)Inputs become less expensive at higher levels of output.
• C)Firms' unit costs rise as output increases.
• D)Firms' unit costs fall as output increases.
• E)Aggregate demand increases at higher levels of national income.

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Definitions:

Functions of Money

Money serves as a medium of exchange, a unit of account, a store of value, and occasionally, a standard of deferred payment.

Fractional Reserve Banking

A banking system in which banks keep a fraction of deposits as reserves and use the remainder for loans.

Bank Liabilities

Financial obligations owed by a bank to its depositors, creditors, and other parties.

Bank Assets

Resources owned by a bank, including loans, securities, cash, and property, that have economic value and can be used to meet its liabilities.