In the "Classical" Region of the Aggregate Supply Curve

question 2

Multiple Choice

In the "classical" region of the aggregate supply curve,

• A)because there are substantial amounts of unemployed resources,output can be increased without driving up prices.
• B)the economy is at the maximum output level,so only the composition of output can be changed,the quantity of output cannot be increased.
• C)the economy is on the production possibilities frontier.
• D)attempts to expand output will result in increases in both prices and output.
• E)the economy is at the maximum output level,so only the composition of output can be changed,the quantity of output cannot be increased AND the economy is on the production possibilities frontier.

---

Definitions:

Raw Materials

The basic substances in their natural, modified, or semi-processed state used as inputs for manufacturing.

Storeroom

A room or space used to store supplies, materials, and equipment awaiting use in production or operations.

Overapplied Manufacturing Overhead

This occurs when the manufacturing overhead allocated to products exceeds the actual manufacturing overhead costs incurred.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including maintenance, utilities, and quality control, that cannot be directly traced to specific products.