How Will a Favourable Supply Shock Shift the Short-Run Phillips

question 98

Multiple Choice

How will a favourable supply shock shift the short-run Phillips curve, and how does unemployment change?

• A) It will shift the short-run Phillips curve right, and unemployment will rise.
• B) It will shift the short-run Phillips curve right, and unemployment will fall.
• C) It will shift the short-run Phillips curve left, and unemployment will rise.
• D) It will shift the short-run Phillips curve left, and unemployment will fall.

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Definitions:

Overhead Variances

Differences between the estimated and actual overhead costs in manufacturing or business operations.

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remains constant regardless of the level of production, such as depreciation of equipment and salary of supervisors.

Budget Variance

The difference between budgeted and actual figures for a given period, indicating under or overspending.

Machine-Hours

A measure of production time, calculating the total hours a machine is operated in the production of goods.