With Short-Run Aggregate Supply

question 43

Multiple Choice

With short-run aggregate supply,

• A)input prices are fixed or slower to change than output prices.
• B)output prices are fixed or slower to change than input prices.
• C)input prices are variable and change quickly.
• D)output prices are not a consideration.

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Definitions:

Inventory Conversion Period

The average length of time to convert materials into finished goods and then to sell them; calculated by dividing total inventory by sales per day.

Operating Cycle

The Operating Cycle is the period of time it takes for a business to purchase inventory, sell products, and convert the sales into cash, reflecting the efficiency with which a company manages its core operations.

Cash

Money in the form of coins or banknotes, especially that issued by a government.

Accruals

Accounting adjustments for revenues that have been earned but not yet recorded, and expenses that have been incurred but not yet recorded.