Refer to the Graph $A D _ { 1 } \text { and } A S _ { 1 }$

question 88

Multiple Choice

Refer to the graph. Suppose that the economy is at an initial equilibrium where the AD $A D _ { 1 } \text { and } A S _ { 1 }$ curves intersect. Demand-pull in?ation in the long run can best be illustrated as a shift of

• A) \(\mathrm { AS } _ { 1 } \text { to } \mathrm { AS }_2 \text {, and back again to } \mathrm { AS } _\text {1}.\)
• B) \(A D _ { 1 } \text { to } A D _ { 2 } \text {, and back again to } A D _ { 1 } \text {. }\)
• C) \(\mathrm { AS } _ { 1 } \text { to } \mathrm { AS } _ { 2 } \text {, consequently making } A D _ { 1 } \text { shift to } A D _ { 2 }\)
• D) \(\mathrm { AD } _ { 1 } \text { to } A \mathrm { D } _ { 2 } \text {, consequently making } \mathrm { AS } _ { 1 } \text { shift to } \mathrm { AS } _ { 2 } \text {. }\)

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Definitions:

Idle Capacity

Unused or underused production capacity within a business, often leading to inefficiency and increased costs.

Time-Driven Activity-Based Costing

A costing methodology that assigns costs to products or services based on the time resources are consumed in producing them.

Customer Cost Analysis

The process of evaluating all costs associated with acquiring and serving customers to determine profitability.

Customer Service Department

A division of a business that handles customer inquiries, complaints, and provides assistance with products or services.