In the Case of a Permanent Negative Supply Shock

question 223

Multiple Choice

In the case of a permanent negative supply shock

• A) only the long-run aggregate supply curve shifts leftward.
• B) only the short-run aggregate supply curve shifts leftward.
• C) both the long-run and short-run aggregate supply curves shift leftward.
• D) there are no shifts in either the long-run or short-run aggregate supply curve.

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Definitions:

Objectives

Specific, measurable goals set by a business or individual to guide activities and measure performance effectively.

Budgets

Financial plans that estimate revenue and expenses over a specified future period, guiding spending and investment decisions.

Merchandise Purchases Budget

A financial plan outlining the projected purchases of merchandise for resale over a certain period, considering expected sales and inventory levels.

Required Purchases

Required purchases are the amount of goods a company needs to buy in order to meet its sales demand and maintain its inventory at a desired level.