Exhibit 10-2 -If the Actual Price Level in Exhibit 10-2 Exceeds the 10-2

question 94

Multiple Choice

Exhibit 10-2
-If the actual price level in Exhibit 10-2 exceeds the expected price level,then

• A)equilibrium output might be Y₂ in the short run
• B)equilibrium output might be Y₁ in the short run
• C)equilibrium output might be Y₃ in the short run
• D)potential output is greater than actual output
• E)unemployment is above the natural rate

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Definitions:

Internal Failure Cost

Costs associated with defects found before a product reaches the customer, including scrap and rework expenses.

Quality Cost Report

A document or tool that tracks the costs associated with ensuring the quality of products or services, including prevention, appraisal, and failure costs.

Warranty Repairs

Services offered by manufacturers or retailers to repair, replace, or rectify defects in products within a specified period after purchase, at no cost to the customer.

Internal Failure Cost

Costs associated with defects found before the product is delivered to the customer, including scrap and rework.