The Only Way to Rationalize an Upward Slope for the Short-Run

question 128

True/False

The only way to rationalize an upward slope for the short-run aggregate-supply curve is to argue that wages are sticky in the short run.

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Definitions:

Super-Variable Costing

A costing method that classifies all direct labor and manufacturing overhead costs as fixed period costs and only direct materials as a variable product cost.

Variable Costing

An accounting method that only assigns variable costs to inventory, treating fixed costs as period expenses.

Manufacturing Overhead Costs

Indirect costs associated with manufacturing, which are not directly attributable to specific units produced, such as maintenance, utilities, and salaries of indirect labor.

Net Operating Income

Earnings from a company's core business operations, excluding deductions for interest and taxes.