When Potential GDP Increases,the Potential GDP Line ________,And the Aggregate

question 198

Multiple Choice

When potential GDP increases,the potential GDP line ________,and the aggregate supply curve ________.

• A)shifts rightward;shifts rightward
• B)shifts rightward;shifts leftward
• C)shifts leftward;shifts rightward
• D)shifts leftward;shifts leftward
• E)shifts rightward;does not shift

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Definitions:

Activity Base

A measure upon which the allocation of costs is based in activity-based costing, often relating to a metric that causes costs to occur such as machine hours or labor hours.

Cost Behavior

The way in which costs change in relation to variations in an organization’s activity level.

Variable Costs

Costs that change in proportion to the level of production or sales, such as raw materials and direct labor.

Activity Level

A measurement of the volume of production or the quantity of services provided.