The Horizontal Short-Run Aggregate Supply Curve

question 201

Multiple Choice

The horizontal short-run aggregate supply curve

• A) assumes that wages and all other input prices are constant.
• B) shows that real GDP can be increased only when prices increase.
• C) assumes that there is full employment in the economy.
• D) assumes that opportunity cost is constant.

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Definitions:

Variable Maintenance Costs

These are expenses that fluctuate in direct proportion to the level of activity or production, such as the costs of repairing machinery which increase with more intensive use.

Equipment Services Department

A division within an organization responsible for maintaining, repairing, and ensuring the operational efficiency of machinery and equipment.

Fabrication

The process of constructing products by combining diverse materials through various manufacturing techniques.

Assembly Departments

Specific areas or segments in a manufacturing facility where components are assembled into final products.