In the Long Run,the Aggregate Supply Curve Is Vertical Because

question 54

Multiple Choice

In the long run,the aggregate supply curve is vertical because

• A) in the long run, potential output is less than actual output.
• B) input prices and output prices are unaffected by changes in aggregate demand.
• C) aggregate demand becomes horizontal.
• D) input prices change by the same proportion as product prices, leaving output levels unchanged.
• E) excess capacity allows firms more resource flexibility.

Understand the importance and methods of reflective analysis and planning for leaders.

Understand the concept of hedging and its application in financial management.

Comprehend the investment strategies and risk management practices of different financial institutions.

Identify factors influencing the investment time horizon and how it impacts investment choices.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated based on estimated costs and activity levels.

Predetermined Overhead Rate

An estimated rate used to apply manufacturing overhead to products or job orders, based on expected activity levels.

Manufacturing Overhead

Expenses tied to the production process that do not include direct labor or materials are known as indirect costs.

Variable Costs

Variable costs are expenses that vary directly with the level of production or sales volume, such as materials and labor.