How Does the Aggregate Demand and Aggregate Supply Model Reflect

question 47

Multiple Choice

How does the aggregate demand and aggregate supply model reflect a rise in production costs?

• A)The short-run aggregate supply curve shifts to the right.
• B)The short-run aggregate supply curve shifts to the left.
• C)The aggregate demand curve shifts to the right.
• D)The aggregate demand curve shifts to the left.

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Definitions:

Inventory

Inventory refers to raw materials, work-in-process, and finished goods that are held by a company in anticipation of eventual sale.

Controllable Costs

For a level of management, the costs that can be influenced (increased, decreased, or eliminated) by management at that level.

Management

The process of dealing with or controlling things or people, often within a business or organization.

Manufacturing Margin

The difference between the sales revenue generated from manufactured goods and the cost of goods sold.