As Real GDP Increases the Equilibrium Point of Aggregate Demand

question 122

Multiple Choice

As real GDP increases the equilibrium point of aggregate demand (AD) and short run aggregate (SRAS) supply move how, with regards to long run aggregate (LRAGS) supply?

• A)The LRAGS moves to the right, and the AD and SRAS move up.
• B)The LRAGS moves to the right, and the AD and SRAS move down.
• C)The LRAGS moves to the left, and the AD and SRAS move up.
• D)The LRAGS moves to the left, and the AD and SRAS move down.

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Definitions:

Indirect Materials

Supplies used in the production process that cannot be directly traced to specific products, such as lubricants for machinery.

U.S. Economic Activity

The total production, distribution, and consumption of goods and services within the United States, reflecting the health of the nation's economy.

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including costs of materials, labor, and overhead.

Finished Goods Inventory

Represents the value of a company's completed products ready for sale but not yet sold at the end of an accounting period.