If AD Increases at a Faster Rate Than AS, the Result

question 52

Multiple Choice

If AD increases at a faster rate than AS, the result will be

• A)demand-side inflation.
• B)supply-side inflation.
• C)falling prices.
• D)stable prices.

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Definitions:

Write Down

The reduction in the book value of an asset when its fair market value has fallen below its current book value.

Accountants

Professionals who perform accounting functions such as audits or financial statement analysis according to prescribed methods.

Inventory Valuation Method

The approach a company uses to determine the cost of its inventory, affecting the cost of goods sold and profitability; common methods include FIFO, LIFO, and weighted average.

Financial Statements

Formal reports detailing the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.