A Supply Shock Is Defined as

question 77

Multiple Choice

A supply shock is defined as

• A) a decrease in full-employment output.
• B) a surprise event that changes the firm's production costs.
• C) a reduction in aggregate demand that has a negative impact on the firm's revenue.
• D) a sudden upward movement along the short-run aggregate supply curve.
• E) an attempt by employees to negotiate a wage increase.

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Definitions:

Repairs

Expenditures to restore an asset to its former condition or to keep it in operable condition without increasing its life or value significantly.

Warranty Expense

Costs a company anticipates or incurs for the repair or replacement of defective products during the warranty period.

Repairs

Expenses incurred to restore an asset to a condition where it can perform its intended function, without improving beyond its original state.

Accrued Vacation Pay

Represents the amount of vacation time earned by employees that has not yet been used or paid out, and is recorded as a liability on the company's balance sheet.