The Short-Run Version of Aggregate Supply Assumes That Product Prices

question 63

Multiple Choice

The short-run version of aggregate supply assumes that product prices are:

• A) Fixed while resource prices are flexible
• B) Flexible while resource prices are fixed
• C) Both input and product prices are flexible
• D) Both input and product prices are fixed

---

Definitions:

Departmental Contributions

The financial or resource contributions made by individual departments towards the achievement of the overall organizational goals.

Direct Expense

Direct expense refers to costs directly incurred in the manufacturing of a product or in providing a service, distinguishable by its direct association with specific business activities.

Indirect Expenses

Costs that are not directly attributable to the production of goods or services, such as administrative and marketing expenses.

Investment Center

A business unit within a company that is responsible for its own revenue, expenses, and investment of capital, often evaluated on its return on investment.