What Must the Government Do in Order to Maintain Real

question 92

Multiple Choice

What must the government do in order to maintain real output above its natural level for a sustained period of time?

• A)Bring about repeated increases in the level of aggregate demand.
• B)Bring about a one-shot permanent increase in aggregate demand.
• C)Increase aggregate demand and then maintain the new level of demand.
• D)Shift the aggregate demand curve to the right and then allow aggregate demand to slowly decrease.

---

Definitions:

Finished Goods Inventory

The stock of completed products ready for sale.

Cost of Goods Sold

The direct costs attributable to the production of the goods or services sold by a company, including materials and labor costs.

Cost of Goods Manufactured

The total production cost of goods that have been completed in a specific accounting period, including labor, materials, and overhead costs.

Depreciation Expense

Distributing the cost of a physical asset methodically over the time it is useful.