The Figure Above Shows the Aggregate Supply Curve and Potential

question 163

Multiple Choice

The figure above shows the aggregate supply curve and potential GDP.
-Based on the figure above,the aggregate supply curve shifts rightward and the potential GDP line does not change when

• A)the money wage rate rises.
• B)the price level rises.
• C)the money wage rate falls.
• D)the price level falls.
• E)both the price level and money wage rate rise by the same proportion.

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Definitions:

Opportunity Cost

The financial loss involved in not selecting the subsequent top preference during the decision-making process.

Cash Flow Estimate

An approximation of the amount of money expected to move in and out of a business within a specific time period.

Time Value of Money

Calculations involving the present and future values of money under the action of compound interest. Also called discounted cash flow.

Capital Budgeting Techniques

Methods used by companies to evaluate the profitability and financial feasibility of investment projects.