How Does an Increase in the Aggregate Demand Translate in the Phillips

question 53

Multiple Choice

How does an increase in the aggregate demand translate in the Phillips curve model?

• A) as an upward movement along the short-run Phillips curve
• B) as a shift to the right of the short-run Phillips curve
• C) as a downward movement along the short-run Phillips curve
• D) as a shift to the left of the short-run Phillips curve

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Definitions:

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, or loan payments.

Variable Costs

Costs that change in proportion to the amount of goods or services produced.

Average Total Cost

The sum of all production costs divided by the quantity of output produced, yielding the cost per unit on average.

Output

The complete sum of products or services created by an enterprise, field, or economic entity.