If the Price Level Kept Increasing, the Short-Run Aggregate Supply

question 234

Multiple Choice

If the price level kept increasing, the short-run aggregate supply (SRAS) curve would get steeper because

• A) all the unemployed would eventually be hired.
• B) there are limits to how long workers can work long hours and capital can go without proper maintenance.
• C) the rate at which capacity can be expanded increases indefinitely.
• D) the long-run aggregate supply curve is horizontal.

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Definitions:

Transactions

The exchange of goods, services, or funds between two or more parties, forming the basis of accounting records.

Debit Credit

The two aspects of every financial transaction, where debit increases assets or expenses and credit increases liabilities, equity, or income.

Par Value

The nominal value of a bond, share of stock, or coupon as stated by the issuer, often used as a legal face value.

Common Stock

Holding shares in a company grants investors a portion of ownership, allowing them to vote on corporate matters and receive a portion of the profits via dividends.