In the Short Run, a Supply Shock That Shifts the Short-Run

question 349

Multiple Choice

In the short run, a supply shock that shifts the short-run aggregate supply curve leftward____________ Real GDP and ____________ the price level.

• A) decreases; raises
• B) decreases; lowers
• C) increases; lowers
• D) increases; raises

---

Definitions:

Sales Discounts

A reduction in the price of goods sold, offered by the seller to the buyer, often to encourage prompt payment.

Periodic Inventory System

A method of inventory valuation for financial reporting purposes where a physical count of all inventory is performed at specific intervals to determine the level of inventory and the cost of goods sold.

Net Method

An accounting method that records purchases or sales of goods and services after deducting any discounts, returning the net amount.

Credit Terms

The payment conditions set by a seller for the buyer, including the period allowed for payment and any cash discount for early payment.