The Economy's Aggregate Supply Curve Is Drawn Under Two Main

question 93

Multiple Choice

The economy's aggregate supply curve is drawn under two main assumptions.They are

• A)firms' unit costs are constant; prices of all factors of production are constant.
• B)firms' unit costs are constant; the state of technology is constant.
• C)firms will produce more output only if prices rise; technology improves only if prices rise.
• D)the prices of all factors of production are constant; the state of technology is constant.
• E)the prices of all factors of production are constant; productivity improves as the price level rises.

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Definitions:

Preferred Stock

Class of capital stock that has preference to a corporation’s profits and assets.

Book Value

The net value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus accumulated depreciation.

Common Stock

Shares representing ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the owners' share of the company.