The Slope of the Immediate-Short-Run Aggregate Supply Curve Is Based

question 137

Multiple Choice

The slope of the immediate-short-run aggregate supply curve is based on the assumption that:

• A) Both input and output prices are fixed
• B) Neither input nor output prices are fixed
• C) Input prices are flexible but output prices are fixed
• D) Input prices are fixed but output prices are flexible

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Definitions:

Variable Costs

Charges that adjust based on the degree of activity or output levels in an enterprise.

Profits

The financial gain achieved when the revenues from business activities exceed the expenses, costs, and taxes involved in sustaining the activity.

Revenue

The total amount of money generated by a company from its business activities, such as sales of products or services, before any expenses are deducted.

Futures Contract

A formal legal contract to purchase or sell a specific commodity or financial instrument at an agreed-upon price at a future date.