In the Short Run, a Supply Shock That Shifts the Short-Run

question 21

Multiple Choice

In the short run, a supply shock that shifts the short-run aggregate supply curve leftward ________ real GDP and ________ the price level.

• A) increases; raises
• B) decreases; raises
• C) increases; lowers
• D) decreases; lowers

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Definitions:

Rate Variance

The difference between the actual rate paid for something and the standard or expected rate, often analyzed in budgeting and cost management.

Total Cost Variance

measures the difference between the actual cost of producing something and its standard cost, highlighting efficiency and budgeting issues.

Variable Factory Overhead

Costs in manufacturing that fluctuate with the level of production, such as utilities or materials.

Direct Materials

Raw materials that are directly incorporated into a finished product and can easily be traced to the product.