Suppose There Was an Unexpected Increase in Aggregate Demand

question 281

Multiple Choice

Suppose there was an unexpected increase in aggregate demand. We would expect to observe

• A) frictional unemployment to increase.
• B) the duration of unemployment and the amount of unemployment to decrease.
• C) higher wages, with the duration of unemployment and the amount of unemployment unchanged.
• D) a decrease in aggregate demand.

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Definitions:

Work in Process Inventory

Goods partially completed in production but not yet ready for sale.

Cost

The amount of money or resources expended to acquire an asset, achieve an objective, or operate a service.

LIFO Inventory Method

An inventory costing method where the last items purchased or produced are considered the first items sold; stands for Last-In, First-Out.

Oldest Inventory Purchase Costs

Refers to the costs associated with the earliest batch of products bought by a business, crucial for inventory valuation methods like FIFO (First-In, First-Out).