As a Result of a Positive Shock To $\vec { C }$

question 21

Multiple Choice

As a result of a positive shock to $\vec { C }$ :

• A) inflation and output growth increase in the short run,but in the long run they return to the rates before the shock.
• B) inflation and output growth decrease in the short run,but in the long run they return to the rates before the shock.
• C) inflation increases and output growth decreases in the short run,but in the long run they return to the rates before the shock.
• D) inflation and output growth increase in both the short run and the long run.

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Definitions:

Inputs

Resources used in the production process, including raw materials, labor, and overhead costs.

Outputs

Outputs are the goods or services produced by a company or an economic system as a result of its inputs and processes.

Controllable Variance

The portion of variance that can be directly managed or influenced by a manager, often related to costs within a specific period.

Variable Overhead

Costs that fluctuate with the level of output or production activity, such as utilities for a manufacturing line.