A Fall in the Price of Foreign Inputs Leads to a

question 86

Multiple Choice

A fall in the price of foreign inputs leads to a

• A)rightward shift of the AD curve.
• B)leftward shift of the AD curve.
• C)rightward shift of the SRAS curve.
• D)leftward shift of the SRAS curve.

---

Definitions:

Variable Input

An input in the production process that can be varied in the short term to adjust output, such as labor or raw materials.

Profit-maximizing

The process or strategy by which a firm determines the price and output level that returns the greatest profit.

Output

The total amount of goods or services produced by a firm, industry, or economy in a given period.

Marginal Wage Cost

The additional cost incurred by hiring an extra unit of labor, essentially the change in total wage cost from hiring one more employee.