Figure 12-2 -If an Unanticipated Increase in Demand in Figure 12-2 Shifts

question 140

Multiple Choice

Figure 12-2

-If an unanticipated increase in demand in Figure 12-2 shifts the demand for accountants from D₁ to D₂, how will the higher level of demand influence the wages of accountants in the short run and the long run?

• A)In the short run, wages will increase to W2, but the wage increase will be smaller in the long run.
• B)In the short run, wages will be less than W2, but in the long run, they will rise to W2.
• C)In the short run, wages will increase to W2, and in the long run, they will be even higher than W2.
• D)Employment will increase, but the higher level of demand will not alter the wages of accountants.

Distinguish between goods and services in the economy.

Learn the structure and function of the circular-flow model in economics.

Identify different types of economic resources and capital.

Understand the role and characteristics of an entrepreneur.

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Definitions:

Statement of Financial Position

A financial statement that details an organization's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial health.

Retained Earnings

The portion of a company's profits that are kept or retained rather than distributed to shareholders or used to pay off debt.

Operating Cash Flow

Operating cash flow is the cash generated by a company's regular business operations, reflecting its ability to generate sufficient cash to maintain and grow operations.