An Increase in the Price Level Results in a

question 64

Multiple Choice

An increase in the price level results in a

• A) downward shift in the AE curve and a movement up along the AD curve.
• B) downward shift in both the AE and AD curves.
• C) downward shift in the AD curve and a movement down along the AE curve.
• D) leftward movement along both the AE and AD curves.

---

Definitions:

Resource Consumption

The process of using up resources, such as raw materials, labor, and energy, in the production of goods and services.

Manufacturing Overhead

Manufacturing overhead encompasses all production costs except direct labor and direct materials used in manufacturing.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate costs of producing specific products or services.

Activity Rate

The cost driver rate used in activity-based costing to allocate expenses to cost objects based on their use of activities.