Which of the Following Will Most Likely Increase Short-Run Aggregate

question 24

Multiple Choice

Which of the following will most likely increase short-run aggregate supply?

• A) unfavorable weather conditions in the nation's agricultural areas
• B) an increase in income tax rates
• C) an increase in the expected inflation rate
• D) a reduction in resource prices

Grasp the treatment of fixed and variable costs in both costing methods and their impact on product pricing and cost control.

Understand the concepts of manufacturing margin, contribution margin, and operating income.

Differentiate between absorption costing and variable costing.

Calculate variable and absorption costing operating income and understand their differences.

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Definitions:

Net Exports

The value of a country's total exports minus its total imports; it represents the net amount of goods and services exported to other countries.

Net Capital Outflow

The differential between citizens buying foreign assets and non-citizens purchasing assets within the country.

Real Interest Rates

The interest rate adjusted for inflation, representing the true cost of borrowing and the real yield to investors.

Net Capital Outflow

The difference between a nation's total investment in foreign countries and foreign investments within the nation, over a specified period of time.