Which of the Following Is an Assumption of the Aggregate

question 17

Multiple Choice

Which of the following is an assumption of the aggregate demand-aggregate supply model?

• A)Capital stock cannot be varied in the short run.
• B)An economy is always at full-employment level in the short run.
• C)Producers are reluctant to change prices of their products even in the long run.
• D)Long-run aggregate supply curve slopes upward.

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Definitions:

U.S. GAAP

The Generally Accepted Accounting Principles in the United States, a common set of accounting rules and standards for financial reporting.

IFRS

International Financial Reporting Standards, a set of accounting guidelines that provide a global framework for how public companies prepare financial statements.

Lower of Cost

An accounting principle requiring that inventory be recorded at the lower of its original cost or current market value.

Matching

An accounting principle where expenses are recorded in the period they are incurred to generate revenues.