Recall the Application About the Behavior of Prices in Retail

question 12

Multiple Choice

Recall the Application about the behavior of prices in retail catalogs to answer the following question(s) . Economist Anil Kashyap of the University of Chicago examined the prices of 12 selected goods from L.L. Bean, REI, and The Orvis Company, Inc. Kashyap tracked the prices from the companies' catalogs which were reissued every six months.
-According to this Application, the prices which were tracked in the retail catalogs exemplified the macroeconomic concept of the short run, a period of time in which

• A) price changes are significant because the aggregate supply curve is vertical.
• B) prices never change because the aggregate demand curve is vertical.
• C) prices change frequently because of changes in aggregate supply.
• D) prices don't change very much, implying that the aggregate supply curve is relatively flat.

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Definitions:

Finished Goods Inventories

Products that have completed the manufacturing process but have not yet been sold to customers.

Direct Labor Costs

The wages paid to workers directly involved in the production of goods or services.

Cash Disbursements

Payments made by a business, including expenses, debt payments, and purchases of assets.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured.