If the Prices of Inputs Changes, What Will Happen to the Aggregate

question 51

Multiple Choice

If the prices of inputs changes, what will happen to the aggregate supply curve?

• A)It does not move but the economy moves along the curve.
• B)It depends on whether the input prices rise or fall.
• C)The curve will become flatter or steeper depending on whether the input prices rise or fall.
• D)It shifts inward or outward depending on whether the input prices rise or fall.

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Definitions:

After-Tax Discount Rate

The rate used to discount future cash flows to their present value, adjusted for the impact of taxes.

Income Tax Rate

The percentage of taxable income that individuals or corporations are required to pay to the government.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency.

Straight-Line Depreciation

A way of allocating the financial burden of a material asset over its effective lifespan in identical yearly portions.