Suppose the Price Level Rises and the Money Wage Remains

question 381

Multiple Choice

Suppose the price level rises and the money wage remains constant. This set of changes leads to

• A) an upward movement along the LAS curve.
• B) an upward movement along the SAS curve.
• C) a leftward shift of the SAS curve.
• D) a leftward shift of the SAS curve and the LAS curve.

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Definitions:

LIFO Perpetual Cost Flow

A method of inventory valuation where the last items added to inventory are the first ones considered sold under a perpetual inventory tracking system.

Ending Inventory

Ending inventory refers to the final value or quantity of goods available for sale at the end of an accounting period, after adjustments for sales and acquisitions during the period.

Cost Of Merchandise Sold

The total cost incurred to purchase or produce the goods that a company sold during a specific period.

Average Cost Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.