The Main Reason Why the Economy's Aggregate Supply Curve Slopes

question 111

Multiple Choice

The main reason why the economy's aggregate supply curve slopes upward is that

• A)as the price level rises, businesses incur additional costs.
• B)businesses typically purchase labor and other inputs under long-term contracts that fix the cost of the input in money terms.
• C)as the price level rises, workers have higher real wages to spend for additional consumer goods.
• D)All of these responses are correct.

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Definitions:

Maturity Factoring

Short-term financing in which the factor purchases all of a firm’s receivables and forwards the proceeds to the seller as soon as they are collected.

Short-Term Financing

Borrowing funds or obtaining financial support for a short duration, typically less than a year, to cover immediate needs.

Factor Purchases

Transactions where a company outsources services or acquires assets, typically involving a third-party, or "factor," to facilitate business operations.

Receivables Collection

The process of managing and collecting payments from customers who have purchased goods or services on credit.