If the SRAS Curve Intersects the Aggregate Demand Curve to the Right

question 179

Multiple Choice

If the SRAS curve intersects the aggregate demand curve to the right of LRAS, the result will be:

• A) a recessionary gap.
• B) an inflationary gap.
• C) cyclical unemployment.
• D) long-run equilibrium.

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Definitions:

Choosing Goals

The process of identifying objectives or desired outcomes that guide decision-making and strategic planning in personal or organizational contexts.

Direct Materials Cost

The expense incurred for materials that are directly traceable to the production of goods.

Factory Overhead Cost

Indirect manufacturing costs that are not directly linked to the production process, including utilities, depreciation, and salaries of support staff.

Direct Labor Cost

The compensation given to employees who are directly engaged in manufacturing goods or providing services.