In the Long Run, How Does an Increase in the Rate

question 49

Multiple Choice

In the long run, how does an increase in the rate of growth of the money supply shift the Phillips curves?

• A) It shifts both the short-run and long-run Phillips curves to the right.
• B) It shifts the long-run Phillips curve right and the short-run Phillips curve left.
• C) It shifts only the short-run Phillips curve to the right.
• D) It shifts only the short-run Phillips curve to the left.

---

Definitions:

Conversion Costs

The combined costs of direct labor and overhead that are incurred to convert raw materials into finished products.

Raw Steel

The unprocessed product from melting iron ore, scrap steel, and other additives in a blast furnace, which is the base material for making steel products.

Process Cost System

A method of accounting used in manufacturing where costs are accumulated over a period and averaged over all units produced.

Work In Process Inventory

The direct materials costs, the direct labor costs, and the applied factory overhead costs that have entered into the manufacturing process but are associated with products that have not been finished.