In the Fooling Model,suppose That from an Initial AD/SAS/LAS Equilibrium

question 97

Multiple Choice

In the fooling model,suppose that from an initial AD/SAS/LAS equilibrium a sudden expansion of aggregate demand occurs.With fooling,we would find employment and the actual real wage in the labor market diagram by moving

• A)"northeast" along the labor supply curve.
• B)"northwest" along the labor demand curve.
• C)"southeast" along the labor demand curve.
• D)"southwest" along the labor supply curve.

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Definitions:

Accrual Basis

A bookkeeping approach that logs income and expenses at the time they are accrued, without taking into account the timing of the cash flows.

Cash Basis

An accounting method where revenues are recognized when cash is received, and expenses are recognized when cash is paid out.

Administrative Expenses

Expenses incurred that are not directly tied to a specific function like manufacturing, production, or sales, usually including items like rent, utilities, and management salaries.

Operating Expenses

Costs associated with the day-to-day operations of a business, such as rent, utilities, salaries, and maintenance, but not including cost of goods sold.