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:

Debit Memorandum

A document or entry recorded to reflect an adjustment or correction, usually increasing the amount a buyer owes to a seller.

Credit Memorandum

A document issued by a seller to a buyer, reducing the amount that the buyer owes under the terms of an earlier invoice.

Petty Cash

A small amount of cash kept on hand used for paying minor or incidental expenses in a business setting.

Postage Expense

The cost incurred by a business for sending mail.