If There Is an Adverse Supply Shock, What Will Most

question 188

Multiple Choice

If there is an adverse supply shock, what will most likely happen?

• A) The aggregate supply curve and the short-run Phillips curve will both shift right.
• B) The aggregate supply curve and the short-run Phillips curve will both shift left.
• C) The aggregate supply curve will shift right, and the short-run Phillips curve will shift left.
• D) The aggregate supply curve will shift left, and the short-run Phillips curve will shift right.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit from a company’s ordinary, core business operations.

Contribution Format

An income statement layout that separates fixed and variable costs, allowing for the calculation of contribution margin and easier analysis of profitability.

Operating Income

A financial metric that shows how much of a company's revenue is left over after paying for variable costs of production like wages and raw materials.

Contribution Format

A method of income statement presentation that separates fixed costs from variable costs to show the contribution margin.