Stagflation Arises in the Context of the AD-AS Model When

question 70

Multiple Choice

Stagflation arises in the context of the AD-AS model when some external factor causes

• A) the AD curve to shift leftwards.
• B) the AD curve to shift rightwards.
• C) the SRAS curve to shift upwards.
• D) the SRAS curve to shift downwards.
• E) the LRAS curve to shift to the right.

Interpret R-squared in the context of cost variation and its explanatory power regarding the independent variable.

Apply the high-low method to estimate variable and fixed components of costs from given data.

Analyze mixed costs using different approaches including the high-low method, least-squares regression, and account analysis.

Estimate the total cost, variable cost per unit, fixed costs, and contribution margin using cost-volume-profit (CVP) analysis.

---

Definitions:

Materials Cost Per Unit

The total cost of materials divided by the number of units produced, indicating the material cost for each unit.

Average Cost Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items in inventory.

Direct Materials

Direct inputs in product manufacturing that can be easily identified and represent a considerable part of the production expenses.

Process Costing

A costing method typically used in industries where production is continuous, and costs are assigned to units of output through an averaging process.