Consider the Nature of Macroeconomic Equilibrium

question 107

Multiple Choice

Consider the nature of macroeconomic equilibrium. If, at a particular price level, the total output demanded is greater than that supplied by producers, then

• A)the price level will decline toward its equilibrium value.
• B)the aggregate supply curve will shift to the left, re- establishing equilibrium.
• C)the price level will rise toward its equilibrium value.
• D)the aggregate demand curve will shift to the left, re- establishing an equilibrium.
• E)the aggregate supply curve will shift to the right, re- establishing an equilibrium.

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Definitions:

Cash Budget

A detailed plan showing how cash resources will be acquired and used over a specific time period.

Master Budget

A comprehensive financial planning document that consolidates all of a company's budgets for various departments or activities.

Manufacturing Overhead Budget

An estimation of the costs that are not directly attributable to products but are necessary for the manufacturing process, including utilities, depreciation, and maintenance of equipment.

Non-Cash Charges

Expenses reported on the income statement that do not require an actual cash outflow, such as depreciation and amortization.