According to the Theory of New Classical Economics, If Productivity

question 274

Multiple Choice

According to the theory of new classical economics, if productivity decreases, the aggregate supply curve shifts _____, the price level rises, and aggregate output_____.

• A) right; increases
• B) left; remains constant
• C) right; decreases
• D) left; decreases

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Definitions:

Break-Even

The point at which total costs and total revenue are equal, meaning there is no profit or loss.

Sales Dollars

The total amount of revenue generated from the sale of goods or services, measured in dollars.

Common Fixed Expenses

Fixed costs not directly attributed to any specific segment of a business, benefiting the entire organization.

Absorption Costing

An accounting method that includes all manufacturing costs — direct materials, direct labor, and both variable and fixed manufacturing overhead — in the cost of a product.