If the Price Level in the Current Year Is Much

question 84

Multiple Choice

If the price level in the current year is much higher than the expected price level,_____.

• A)firms will increase production beyond the economy's potential level
• B)the unemployment rate will increase
• C)firms will decrease production below the economy's potential level
• D)the short-run aggregate supply curve will become steeper
• E)the unemployment rate will fall to zero

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Definitions:

Consignment

A business arrangement where goods are left in the possession of another party to sell, but the owner retains ownership until the goods are sold.

Days' Sales

Refers to the ratio that indicates how many days worth of sales a company has in inventory, providing insight into inventory management efficiency.

Inventory

An accounting term for goods and materials that a business holds for the ultimate goal of resale or repair.

Inventory Turnover

A measure of how frequently a company sells and replaces its stock of goods during a certain period of time, indicating the efficiency of inventory management.