Exhibit 14-6 Aggregate Supply Curve

question 93

Multiple Choice

Exhibit 14-6 Aggregate supply curve

In Exhibit 14-6, where the GDP = $1,200 billion,

• A) everyone in the population over 16 years of age is working.
• B) the economy has reached the full-employment level of real GDP .
• C) GDP can increase to $1,100 billion without triggering an increase in the price level.
• D) no further increases in the price level can generate more real GDP.

---

Definitions:

Salvage Value

An asset's anticipated value at the end of its operational life, as estimated.

Straight Line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Average Accounting Rate of Return

A method to estimate the profitability of investments, calculated by dividing the average annual profit by the initial investment cost.

Straight-Line Depreciation

A scheme for dividing the expenditure of a solid asset over its life span in equal yearly quotas.