Starting from Long-Run Equilibrium,the Long-Run Impact(s)of an Increase in Autonomous

question 60

Multiple Choice

Starting from long-run equilibrium,the long-run impact(s) of an increase in autonomous consumption,compared to the original equilibrium,would be

• A) higher inflation.
• B) higher output.
• C) higher inflation and higher output.
• D) lower inflation and lower output.
• E) lower inflation and higher output.

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Definitions:

Raw Material

The basic material from which a product is made, typically unprocessed or minimally processed substances used in manufacturing.

Direct Labor

Refers to the wages or salaries paid to workers directly involved in the production of goods or services.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain relatively constant regardless of the level of production, such as rent, insurance, and salaries of permanent staff.

Direct Labor

Labor costs directly attributable to the production of specific goods or services within a company.