The Main Effect of a Decrease in the Stock of Capital

question 98

Multiple Choice

The main effect of a decrease in the stock of capital is a(n)

• A)rightward shift of the short-run aggregate supply curve
• B)rightward shift of the aggregate demand curve
• C)leftward shift of the long-run aggregate supply curve
• D)leftward shift of the aggregate demand curve
• E)increase in price and output levels

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Definitions:

Actual Output

The real quantity of goods or services produced by a company, as opposed to estimated or planned production levels.

Standard Cost System

An accounting system that uses predetermined costs for products or services to facilitate variance analysis and budgeting.

Direct Labour Hours

Total hours accumulated by workers directly involved in the fabrication process.

Direct Materials Inventory

The total cost of raw materials that are directly involved in the manufacturing of a product and are currently held in inventory.