In the Short Run, a Contractionary Supply Shock Causes the Average

question 57

Multiple Choice

In the short run, a contractionary supply shock causes the average price level to _____ and the total output level to:

• A) fall; rise.
• B) fall; fall.
• C) rise; rise.
• D) rise; fall.

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Definitions:

Profit

The financial gain realized when the revenues generated from business activities exceed the expenses and costs associated with operating the business.

Unrealised Profit

Profits that have been earned but not yet realized through a transaction, such as an increase in the value of an investment that has not been sold.

Partial Goodwill Method

A method of accounting for a business combination where goodwill is only recorded in relation to the parent's share of ownership in the subsidiary.

NCI

Non-controlling interest (NCI) refers to the portion of equity interest in a subsidiary not owned directly or indirectly by the parent company.