In Japan in 2000 the Price Level Fell by 5

question 214

Multiple Choice

In Japan in 2000 the price level fell by 5 percent and the money wage rate did not change. As a result, there was a

• A) movement down along Japan's short-run aggregate demand curve.
• B) movement down along Japan's short-run aggregate supply curve.
• C) rightward shift in Japan's short-run aggregate supply curve.
• D) movement down along Japan's long-run aggregate supply curve.

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overheads that are incurred to convert raw materials into finished goods.

Raw And In Process

Materials that are either in their natural state and used in the manufacturing of products or materials that are partially processed but not yet completed.

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production.

External Failure Costs

Costs associated with defects that are found after the product reaches the customer, including returns, repairs, and lost sales.