Exhibit 15-2 -Refer to the Graph in the Exhibit.According to Policymakers Who

question 128

Multiple Choice

Exhibit 15-2

-Refer to the graph in the exhibit.According to policymakers who favour a passive approach to policy, how will the economy attain equilibrium at potential output?  

• A) by increasing real wages, thus causing the SRAS curve to shift left
• B) by shifting the SRAS curve to the right
• C) by increasing the money supply or by increasing government spending
• D) by decreasing the money supply or by decreasing government spending

---

Definitions:

Operating Income

Earnings before interest and taxes (EBIT), calculated by deducting operating expenses, including the cost of goods sold (COGS) and other operating expenses, from gross profit.

Fixed Overhead

A type of business expense that does not change with the level of production or sales, such as rent, salaries, and insurance.

Selling Costs

Expenses associated with the selling process, including advertising, sales commission, and shipping costs.

Operating Loss

A situation where a company's operating expenses exceed its revenue, indicating that it is not making a profit from its core business activities.