Which of the Following Statements Is True

question 7

Multiple Choice

Which of the following statements is true?

• A) When aggregate supply is perfectly elastic, increases in aggregate demand will be in?ationary.
• B) Economic growth that results from an increase in aggregate supply also increases the rate
• C) Demand-side policies reduce the difference between actual and potential GDP and can only close the output gap.
• D) Real expansion of the economy involves an increase in aggregate demand.

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Definitions:

Raw Materials Purchases

The total cost of all components bought for use in the production process of goods.

Cash Disbursements

Outgoing payments made by a business, often documented in a cash disbursement journal, including expenses, creditor payments, and other financial outflows.

Cost of Goods Sold

Cost of goods sold (COGS) represents the direct costs attributable to the production of goods sold by a company, including materials and labor.

Merchandise Inventories

Goods or products that a company holds for the purpose of sale to customers in the ordinary course of business.