Identify the Correct Statement About the Aggregate Supply Curve

question 22

Multiple Choice

Identify the correct statement about the aggregate supply curve.

• A)The aggregate supply curve is irrelevant for determining macroeconomic equilibrium.
• B)The aggregate supply curve shows the various quantities of a particular good that is produced in the economy.
• C)The aggregate supply curve shows an inverse relationship between price level and employment.
• D)The aggregate supply curve shifts inward with an increase in consumer spending, investment, government spending, and net exports.
• E)The aggregate supply curve relates total output in the economy to alternative price levels.

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Definitions:

Direct Method

A method of computing the net cash provided by operating activities in which the income statement is reconstructed on a cash basis from top to bottom.

Indirect Method

A method of computing the net cash provided by operating activities that starts with net income and adjusts it to a cash basis. It is also known as the reconciliation method.

Inventory

Raw materials, work-in-process, and finished goods that a company holds with the intent to sell or use in production.

Wages Payable

An account that records the amounts owed to employees for work performed that have not yet been paid.