Which of the Following Can Explain the Upward Slope of the Short-Run

question 87

Multiple Choice

Which of the following can explain the upward slope of the short-run aggregate supply curve?

• A)nominal wages are slow to adjust to changing economic conditions
• B)as the price level falls,the exchange rate falls
• C)an increase in the money supply lowers the interest rate
• D)an increase in the interest rate increases investment spending

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Definitions:

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Debt Financing

Debt Financing involves raising capital through borrowing money that must be repaid over time, with interest.

Cost of Capital

The return a company needs to earn on its investment projects to maintain its value and attract funds.

Financial Decision Makers

Individuals or groups responsible for making investment, financing, and dividend decisions within a company.