Shifts in Aggregate Demand Affect the Price Level in

question 45

Multiple Choice

Shifts in aggregate demand affect the price level in

• A)the short run but not in the long run.
• B)the long run but not in the short run.
• C)both the short and long run.
• D)neither the short nor long run.

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Definitions:

Order Up To Level

A replenishment strategy used in inventory management where stock is ordered up to a predetermined level whenever the inventory falls below a certain point.

Safety Inventory

The reserve stock maintained to prevent stockouts, ensuring smooth operations despite demand and supply fluctuations.

Pipeline Inventory

Goods in transit or in the process of distribution, considered as a part of a company's inventory.

Product Substitution

The practice of replacing one product with another, often due to stockouts, customer preferences, or cost considerations, to maintain service levels and customer satisfaction.