Suppose That the Price of Inputs Decreases

question 78

Multiple Choice

Suppose that the price of inputs decreases. As a result, we would expect:

• A) the upward sloping portion of the aggregate supply to increase.
• B) the upward sloping portion of the aggregate supply to decrease.
• C) aggregate demand to increase.
• D) aggregate demand to decrease.

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Definitions:

Factor Purchases

Transactions where a company outsources services or acquires assets, typically involving a third-party, or "factor," to facilitate business operations.

Receivables Collection

The process of managing and collecting payments from customers who have purchased goods or services on credit.

Trust Receipt

A document issued by a bank to a buyer who has obtained a loan to purchase goods, wherein the buyer agrees to hold the goods in trust for the bank until the loan is repaid.

Short-Term Financing

Funding obtained for a period typically less than a year, used to cover immediate financial needs of a business.