Consider the Basic AD/AS Model

question 69

Multiple Choice

Consider the basic AD/AS model. If there is a decrease in the cost of non- labour inputs to production, the result will be to

• A)shift the AS curve to the left.
• B)shift the AS curve to the right.
• C)shift the AD curve to the right.
• D)shift the AD curve to the left.
• E)cause a movement to the left along the AS curve.

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Definitions:

Curvilinear

Pertaining to or representing by a curve or curves; often applied in economics and statistics to describe non-linear relationships.

Variable Costs

Costs that change in proportion to the amount of goods produced or the volume of sales.

Cost Classification

Cost Classification involves categorizing costs based on their characteristics, such as fixed vs variable costs, to facilitate financial analysis and management.

Mixed

In finance, this term could refer to an investment portfolio comprising various types of assets, aimed at diversifying risk.