Consider the Basic AD/AS Macro Model

question 56

Multiple Choice

Consider the basic AD/AS macro model.A rise in an input price like the price of oil would be expected to cause a new macroeconomic equilibrium in which the price level

• A)and real GDP are higher than in the initial equilibrium.
• B)and real GDP are lower than in the initial equilibrium.
• C)is lower and real GDP higher than in the initial equilibrium.
• D)is higher and real GDP remained the same as in the initial equilibrium.
• E)is higher and real GDP lower than in the initial equilibrium.

---

Definitions:

Weighted Average Method

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

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, converting them into an amount of fully completed units.

Conversion Activity

The process of transforming raw materials or components into finished goods or services.

Cost Per Equivalent Unit

The calculation used in process costing to allocate costs to partially completed units, giving them the same treatment as fully completed units.