An Increase in Labor's Productivity Will Cause the SRAS Curve

question 88

Multiple Choice

An increase in labor's productivity will cause the SRAS curve to shift __________ and the price level to __________.

• A) leftward; increase
• B) rightward; decrease
• C) rightward; increase
• D) leftward; decrease

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Definitions:

Direct Write-Off Method

This accounting practice writes off bad debts directly against income at the time they are determined to be uncollectible, bypassing any allowance account.

Allowance for Doubtful Accounts

This is an estimation of the amount of receivables that a company does not expect to actually collect, reflecting potential losses due to customers' inability to pay.

Uncollectible

Uncollectible refers to debts or receivables that are deemed to be impossible to collect, often resulting in a write-off by the business.

Maturity Value

The amount that will be received at the end of a bond or other debt instrument's term.