The Aggregate Supply Curve Slopes Upward Because Firms

question 23

Multiple Choice

The aggregate supply curve slopes upward because firms

• A)seek to maximize profits and output.
• B)normally can purchase inputs at fixed prices.
• C)employ technology, which is always fixed.
• D)purchase inputs whose prices rise as output rises.

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Definitions:

FIFO Cost

FIFO, or First-In, First-Out, is an inventory valuation method where the costs of the earliest goods purchased or produced are the first to be recognized in determining cost of goods sold.

Dollar-Value LIFO

An inventory valuation method under Last-In, First-Out principle, adjusting for changes in price level or inflation, allowing for a more accurate financial analysis over time.

Inventory Items

Goods or products that a company holds for the ultimate purpose of sale, part of the current assets on a company's balance sheet.

Periodic LIFO

An inventory valuation method that determines the cost of goods sold and ending inventory using the Last In, First Out principle, applied at the end of the accounting period.