In Terms of Aggregate Supply, the Short Run Is a Period

question 205

Multiple Choice

In terms of aggregate supply, the short run is a period in which

• A) the price level is constant.
• B) employment is constant.
• C) real output is constant.
• D) nominal wages and other resource prices are unresponsive to price-level changes.

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Definitions:

Profitability Index

A financial tool that calculates the relationship between the costs and benefits of a project by dividing the present value of future cash flows by the initial investment cost.

Mutually Exclusive

Situations or events that cannot occur at the same time—choosing one precludes the selection of the other.

Negative Net Present Value

A financial metric indicating that the present value of cash inflows is less than the present value of cash outflows, suggesting the investment is not financially viable.

Initial Cost

The upfront expense incurred to purchase an asset or to initiate a project.