Taking into Account the Upward -Sloping Short-Run Aggregate Supply Curve

question 88

Multiple Choice

Taking into account the upward -sloping short-run aggregate supply curve, the short-run effect of an increase in government expenditure on real GDP is that

• A) real GDP increases by less in the short run than in the long run.
• B) real GDP increases by the same amount in the short run as in the long run.
• C) real GDP does not change in the short run because the price level increases.
• D) real GDP increases by more in the short run than in the long run.

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Definitions:

Inventory Valuation

A process used to determine the cost associated with an inventory at the end of a financial period, affecting the cost of goods sold and net income.

Average Cost Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale.

Average Cost

An inventory costing method where the cost of goods sold and ending inventory is determined by taking the weighted average of all units purchased.

Periodic Inventory

A method of inventory accounting where updates to inventory levels are made periodically, often at the end of the fiscal year.