Which of the Following Causes a Rightward Shift of the Short-Run

question 316

Multiple Choice

Which of the following causes a rightward shift of the short-run aggregate supply (SRAS) curve?

• A) an increase in the wage rate
• B) an increase in firms' production without adding inputs
• C) a reduction in the price of a raw material
• D) an increase in the overall price level

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Definitions:

Variable Overhead Rate

This rate reflects the cost of variable overhead allocated to each unit of production, based on an activity such as direct labor hours.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process or providing a service.

Fixed Manufacturing Overhead

Costs that do not change with the level of manufacturing output, including salaries of managers and depreciation of factory equipment.

Direct Labor-Hours

The total hours of labor directly involved in producing goods or providing services.