If the AD Curve Shifts Rightward While the AS Curve

question 101

Multiple Choice

If the AD curve shifts rightward while the AS curve and potential GDP don't change,then

• A)the economy will move from a peak into recession.
• B)the expansion phase of the business cycle occurs.
• C)there will be no change in real GDP,so the economy is at the peak of the cycle.
• D)there will be no change in real GDP,so the economy is at the trough of the cycle.
• E)real GDP does not change.

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Definitions:

Overhead Controllable Variances

The portion of overhead costs that can be directly managed or influenced by decisions made by management.

Volume Variances

The difference between the planned or standard quantities expected and actual quantities, affecting inventory, sales, or production levels.

Work in Process

A term referring to items and materials that are being transformed into finished products but are not yet complete.

Variable Overhead

Variable overhead costs are those expenses that fluctuate with production volume, such as utilities or materials.