When Potential GDP Increases,short-Run Aggregate Supply Also Increases,but Long-Run Aggregate

question 122

True/False

When potential GDP increases,short-run aggregate supply also increases,but long-run aggregate supply does not change.

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Definitions:

Net Operating Income

The profit a company makes from its operations, excluding non-operational revenues and expenses like interest and taxes.

Variable Costing

An accounting method that only includes variable production costs—material, labor, and overhead—in product cost calculations, excluding fixed costs.

Fixed Manufacturing Overhead

The sum of all production costs that do not change with the level of output, including salaries, rent, and utility expenses of a manufacturing facility.

Absorption Costing

An accounting method that includes both variable and fixed manufacturing overhead costs in the cost of producing goods.