Moving Upward Along the SAS Curve Results in a ________

question 65

Multiple Choice

Moving upward along the SAS curve results in a ________ in the price level and ________ in real GDP.

• A) rise; an increase
• B) rise; a decrease
• C) fall; an increase
• D) fall; a decrease

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Definitions:

Reversing Entries

Optional bookkeeping technique in which certain adjusting entries are reversed or switched on the first day of the new accounting period so that transactions in the new period can be recorded without referring back to prior adjusting entries.

Accruals

Accounting adjustments for revenues earned or expenses incurred which have not yet been received or paid, respectively.

Adjusting Entries

Journal entries made at the end of an accounting period to update account balances to their correct amounts.

Normal Balance

The side (debit or credit) of an account that is normally expected to have a higher balance, indicating its increase.