An Increase in Short-Run Aggregate Supply Immediately Leads To

question 15

Multiple Choice

An increase in short-run aggregate supply immediately leads to:

• A) an increase in real wealth and a shift of the aggregate demand curve.
• B) an increase in real wealth and a movement along the aggregate demand curve.
• C) a shift of the aggregate demand curve caused by menu costs.
• D) a shift of the aggregate demand curve caused by money illusion.
• E) an increase in money illusion and a movement along the aggregate demand curve.

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Definitions:

Current Ratio

An indicator of how well a company can satisfy its obligations due within a short period, calculated by taking current assets and dividing them by current liabilities.

Acid-Test Ratio

Acid-test ratio is a financial metric used to determine a company's short-term liquidity position by comparing its most liquid assets to its current liabilities.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are turned over and collected in cash during a period.

Current Ratio

A liquidity ratio that measures a company’s ability to pay short-term and long-term obligations, calculated as current assets divided by current liabilities.