What Will Occur in the Short Run If There Is

question 15

Multiple Choice

What will occur in the short run if there is cost-push inflation and if the government adopts a hands-off approach to it?

• A)an increase in long-run aggregate supply
• B)a decrease in long-run aggregate supply
• C)low unemployment and a loss of real output
• D)high unemployment and a loss of real output

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Definitions:

Periodic Inventory System

An accounting method that records inventory purchase or sale transactions at the end of an accounting period.

Gross Method

An accounting method for recording purchases at the gross invoice amount before deducting any cash discounts for early payment.

Credit Terms

Conditions under which credit will be extended to a borrower, including the amount of credit, interest rate, and repayment schedule.

FOB Shipping Point

A term used in shipping contracts to indicate that the buyer is responsible for the cost of transporting the goods from the shipping point.