The Long-Run Aggregate Supply Curve Will Shift to the Right

question 24

Multiple Choice

The long-run aggregate supply curve will shift to the right if the:

• A) potential output of the economy expands.
• B) economy loses productive capacity.
• C) economy experiences a supply shock.
• D) profit levels of firms increase.

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Definitions:

Transfer Price

The price at which goods or services are sold between departments within the same organization or between affiliated companies.

Division Producing

An organizational unit within a company that is responsible for creating a specific group of products or services.

Intermediate Product

Goods used as inputs in the production of final products, not sold directly to end consumers.

Transfer Price

The price at which goods or services are sold between divisions within the same company.