Which of the Following Is TRUE

question 22

Multiple Choice

Which of the following is TRUE?

• A)Points along the aggregate supply curve show the equilibrium levels of output and prices that are consistent on the demand side of the economy.
• B)Points along the aggregate demand curve show the equilibrium levels of output and prices that are consistent on the supply side of the economy.
• C)Aggregate demand shows the levels of GDP and prices where expenditure decisions and production decisions match.
• D)Aggregate supply shows the levels of GDP and prices where expenditure decisions and production decisions match.

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Definitions:

Acid-Test Ratio

A financial metric that measures a company's immediate liquidity by comparing its most liquid assets to its current liabilities.

Quick Ratio

A liquidity ratio that measures a company's ability to meet short-term obligations with its most liquid assets.

Gross Margin Ratio

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, illustrating how effectively a company uses labor and supplies in production.

Gross Profit

The difference between revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.