The Long- Run Aggregate Supply Curve Is

question 216

Multiple Choice

The long- run aggregate supply curve is

• A) the same as the short- run aggregate supply curve.
• B) horizontal at the full employment price level.
• C) vertical at the full employment level of real GDP.
• D) upward sloping because of the effects of price level changes on real GDP.

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Definitions:

NPV

Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Cost of Capital

The minimum profit percentage a corporation is required to generate from its investment initiatives to keep its market price stable and draw in financing.

Cash Flows

The total amount of money being transferred in and out of a business, especially affecting liquidity.

IRR

The Internal Rate of Return; a financial metric used to estimate the profitability of potential investments.