In the AD-AS Model,money Is Not Neutral in the Short

question 4

Multiple Choice

In the AD-AS model,money is not neutral in the short run if:

• A) unexpected inflation turns into expected inflation.
• B) wages and prices are sticky.
• C) wages and prices are flexible.
• D) the change in the money supply is fully anticipated.

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Definitions:

Unit Fixed Costs

Unit Fixed Costs are the costs that do not change with the volume of production and are allocated per unit based on the total production quantity.

Total Variable Cost

Charges that fluctuate in direct relation to the volume of production or output.

Merchandising Company

A Merchandising Company is a business that purchases finished products and sells them at a profit, without altering the products themselves.

Cost Structure

The composition of a company’s costs, including fixed and variable costs, which impacts its profitability and pricing strategy.