Suppose That the Money Supply Increases

question 140

Multiple Choice

Suppose that the money supply increases. In the long run, employment increases according to which of the following theories?

• A)both the long-run Phillips curve and the aggregate demand and aggregate supply model
• B)neither the long-run Phillips curve nor the aggregate demand and aggregate supply model
• C)only the long-run Phillips curve
• D)only the aggregate demand and aggregate supply model

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Definitions:

Fixed Cost

Costs that do not change with the level of production or sales activity, such as rent or salaries.

Segment Margin

The amount of profit or loss produced by a particular segment of a business, considering only the revenues and expenses directly attributable to that segment.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to fixed costs and profit.

Common Fixed Expenses

Expenses that remain constant in total regardless of changes in the level of activity or volume of production.