If the Price Level Rises by 10 Percent,then All Else

question 108

Multiple Choice

If the price level rises by 10 percent,then all else being equal,the long-run quantity of aggregate supply will

• A) increase by 10 percent.
• B) decrease by 10 percent.
• C) remain unchanged.
• D) increase by more than 10 percent.
• E) increase by less than 10 percent.

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Definitions:

Net Operating Income

Earnings before interest and taxes (EBIT), a measure of a company's profitability from operations.

Minimum Required Return

The minimum return that investors expect to earn from their investment.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity allowed for the actual output, multiplied by the standard price per unit of materials.

Materials Price Variance

The difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.