If Prices Are Completely Flexible,then a Positive Aggregate Demand Shock

question 168

Multiple Choice

If prices are completely flexible,then a positive aggregate demand shock will lead to:

• A) an immediate upward shift of the SRAS curve.
• B) an immediate downward shift of the SRAS curve.
• C) a shift of the long-run aggregate supply curve to the right.
• D) a shift of the long-run aggregate supply curve to the left.

---

Definitions:

Traditional Costing

An accounting method that applies indirect costs to products based on a predetermined overhead rate, typically simpler than activity-based costing.

Activity-Based Costing

A costing methodology that assigns the costs of resources to products or services based on activities and processes involved in their production.

Traditional Costing Method

A cost accounting method that assigns overhead costs to products based on a predetermined overhead rate.

Direct Labor-Hours

A measure representing the total hours worked by employees directly involved in the production of goods or services.