How Would an Adverse Supply Shock Shift the Aggregate Supply

question 28

Multiple Choice

How would an adverse supply shock shift the aggregate supply curves?  

• A) Only the short-run aggregate supply curve would shift outward. 
• B) Only the long-run aggregate supply curve would shift outward. 
• C) Only the long-run aggregate supply curve would shift inward. 
• D) The short-run aggregate supply curve would shift inward, and the long-run aggregate supply curve would shift inward.

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Definitions:

Unused Capacity

The portion of a company's production capability that is not currently being utilized for production.

Job-Order Costing

An accounting methodology that tracks costs individually for each job, rather than on a department or factory-wide basis.

Automated Shaper

Machinery equipped with computer numerical control (CNC) to shape materials into specific designs with minimal human intervention.

Unused Capacity

Refers to the available production or service facility resources that are not currently being used.