If Firms Have Only a Weak Tendency to Raise Markups

question 8

Multiple Choice

If firms have only a weak tendency to raise markups during cyclical expansions,or if there are only a few auction markets in raw materials,then

• A)the SP curve will be relatively flat and a "cold-turkey" cure for inflation will be relatively quick.
• B)the SP curve will be relatively flat and a "cold-turkey" cure for inflation will be long lasting.
• C)the SP curve will be relatively steep and a "cold-turkey" cure for inflation will be relatively quick.
• D)the SP curve will be relatively steep and a "cold-turkey" cure for inflation will be long lasting.

---

Definitions:

Economic Sacrifice

A concept referring to the cost or loss associated with making a particular decision or taking an action.

Disclosure Note

A note included in financial statements that provides additional information relevant to an organization's financial position.

Working Capital

Working capital represents the disparity between an organization's current assets and current liabilities, showcasing its operational efficiency and short-term financial stability.

Account Receivable

Money owed to a company by its clients or customers for goods and services provided on credit.