If There Has Been a Downward Movement Along the Fixed

question 57

Multiple Choice

If there has been a downward movement along the fixed short-run Phillips curve, the _____ curve has shifted to the _____.

• A) AD; left
• B) AD; right
• C) SRAS; left
• D) SRAS; right

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Definitions:

Accrual-Basis

An accounting method that records income and expenses when they are earned or incurred, regardless of when the cash is actually received or paid.

Cash-Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.

Prepaid Insurance

An asset on the balance sheet that represents insurance paid in advance, which will be expensed over the time period it covers.