When the Aggregate Supply Curve Is Horizontal

question 138

Multiple Choice

When the aggregate supply curve is horizontal,

• A) many firms are likely to have excess capacity.
• B) the economy is close to full capacity.
• C) resources are being utilized at full capacity.
• D) the prices level increases with additional production.

---

Definitions:

Dividends per Share

The amount of dividend a company pays out to its shareholders for each share owned.

Market Price

The current price at which an asset or service can be bought or sold in a competitive marketplace.

Common Stock

A type of equity security that represents ownership in a corporation, with holders typically having voting rights and dividend eligibility.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.