Suppose That the Saving Rate in Canada Increases,and Firms Use

question 58

Multiple Choice

Suppose that the saving rate in Canada increases,and firms use the increased saving to invest.What will happen to long-run aggregate supply?

• A)The LRAS will not shift, but the economy moves along the LRAS curve to a lower price level.
• B)It will increase.
• C)It will decrease.
• D)The LRAS will not shift, but the economy moves along the LRAS curve to a higher price level.

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Definitions:

Inventory Item

Goods or materials that a business holds for the ultimate purpose of resale or use in production.

Inventory Value

The total cost or market value of all the goods held by a company intended for sale or for use in producing goods for sale.

Cost Or Market

An accounting method for inventory valuation, valuing inventory at the lower of its historical cost or market value.

Weighted Average Cost

A method of inventory costing that assigns a weighted average cost to each unit of inventory on hand, based on the cost of goods available for sale and the number of units available.