From an Initial Long-Run Equilibrium,if Aggregate Demand Grows More Slowly

question 227

Multiple Choice

From an initial long-run equilibrium,if aggregate demand grows more slowly than long-run and short-run aggregate supply,then Congress and the president would most likely

• A)increase the required reserve ratio and decrease government spending.
• B)decrease government spending.
• C)decrease oil prices.
• D)decrease taxes.
• E)lower interest rates.

---

Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of goods or services and are an integral part of the finished product.

Fixed Costs

Regular expenses that an entity incurs, which are not affected by changes in business activity levels, such as lease payments and insurance premiums, essential for financial planning.

Machine Setup Costs

Expenses incurred to prepare machinery for production, including calibration, cleaning, and testing.

Batch Level

Refers to the classification in cost accounting that associates costs with specific batches of goods or services rather than with individual units or processes.