In the New Keynesian Model, an Increase in Current Total

question 72

Multiple Choice

In the New Keynesian model, an increase in current total factor productivity

• A)shifts output supply right and opens a positive output gap.
• B)shifts output demand left and opens a negative output gap.
• C)shifts output demand right and opens a positive output gap.
• D)shifts output supply right and opens a negative output gap.
• E)shifts output supply left and opens a negative output gap.

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Definitions:

Cost of merchandise sold

The total cost incurred by a company to sell its merchandise during a specific period, including the cost of the goods themselves plus any additional costs related to their sale.

Perpetual inventory system

A method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

LIFO cost method

An inventory costing method that assumes the last items purchased or produced are the first ones sold, impacting the cost of goods sold and inventory valuation.

Gross profit

The difference between revenue and the cost of goods sold before accounting for certain other costs like operating expenses.