Suppose the Full Employment Level of Real Output (Q) for a Hypothetical

question 158

Multiple Choice

Suppose the full employment level of real output (Q) for a hypothetical economy is $500, the price level (P) initially is 100, and prices and wages are flexible both upward and downward. Refer to the
Accompanying short-run aggregate supply schedules. In the long run, an increase in the price level
From 100 to 125 will

• A) increase real output from $500 to $560.
• B) decrease real output from $500 to $440.
• C) change the aggregate supply schedule from (a) to (c) and result in an equilibrium level of real output of $560.
• D) change the aggregate supply schedule from (a) to (b) and result in an equilibrium level of real output of $500.

---

Definitions:

AASB 2

An accounting standard that deals with the recognition, measurement, and disclosure of share-based payments.

Fair Value

The income derived from selling an asset or the cost incurred in moving a liability in a peaceful transaction with counterparts in the market at the date of analysis.

Share Options

Options given by a company to its employees as part of their compensation package, allowing them to purchase shares of the company at a future date at a predetermined price.

Vesting Date

The date on which an employee gains the right to receive benefits or stock options from an employer's plan.