The Aggregate Supply Curve Tends to Be Relatively Steep When

question 21

Multiple Choice

The aggregate supply curve tends to be relatively steep when GDP is above potential output because firms are operating above and _ _ are rising rapidly.

• A)capacity; unit costs
• B)equilibrium output; average costs
• C)profit- maximizing output; total costs
• D)equilibrium output; unit costs
• E)equilibrium output; total costs

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Definitions:

Unrealised Profit

Profit that has been made on paper through an investment but has not yet been cashed in by selling the asset.

Upstream

In a supply chain context, refers to processes or activities that occur at the beginning of the production process or closer to the raw materials stage.

Downstream

Refers to the refining of petroleum crude oil and the processing and purifying of raw natural gas, as well as the marketing and distribution of products derived from crude oil and natural gas.

Unrealised Profit

Profit that has been generated on paper through an increase in the value of an asset but has not yet been realized through a sale.