In the Short Run, an Unanticipated Shift to a More

question 8

Multiple Choice

In the short run, an unanticipated shift to a more restrictive monetary policy is most likely to result in

• A) a decrease in short-term interest rates.
• B) a reduction in the growth rate of real GDP.
• C) an increase in the rate of inflation.
• D) an increase in employment.

---

Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income due to fixed versus variable costs.

Profit And Loss Statement

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, reflecting the company's profit or loss.

Break-Even Point

The point at which total costs equal total revenues, indicating that a business is neither making a profit nor incurring a loss.

Sales Mix

The combination of different products or services that a company sells, impacting its overall profitability and performance.