How Will a Favourable Supply Shock Shift Short-Run Aggregate Supply

question 128

Multiple Choice

How will a favourable supply shock shift short-run aggregate supply, and how will output change?

• A) It will shift short-run aggregate supply left, making output rise.
• B) It will shift short-run aggregate supply left, making output fall.
• C) It will shift short-run aggregate supply right, making output rise.
• D) It will shift short-run aggregate supply right, making output fall.

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Definitions:

Prior Writedown

A reduction in the book value of an asset when its market value falls below its current book value, previously accounted for in financial statements.

Consigned Goods

Items given to a third party to sell on behalf of the owner, but the owner retains ownership until the goods are sold.

Ownership

The legal right or state of having full possession and control over property, assets, or a company.