In the Short-Run,an Increase in the Price of Raw Materials

question 237

Multiple Choice

In the short-run,an increase in the price of raw materials will ________ the price level and ________ real GDP.

• A)raise;increase
• B)raise;decrease
• C)raise;not change
• D)lower;increase
• E)lower;decrease

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Definitions:

Cash Constraints

Financial limitations that restrict the ability to purchase or invest due to the unavailability of liquid assets or cash.

Opportunity Costs

The cost of foregone alternatives when one option is chosen over another, representing the benefits that could have been received by taking the alternate action.

Expected NPV

Net Present Value expected from an investment, taking into account the probability of various outcomes.

Full-Ride Scholarship

A scholarship that covers all the expenses of a student’s education, including tuition, room, board, and possibly other costs.