Economist Brown Believes That Changes in Aggregate Demand Affect Only

question 157

Multiple Choice

Economist Brown believes that changes in aggregate demand affect only the price level,and economist Black believes that changes in aggregate demand affect only Real GDP.What does the aggregate supply (AS) curve look like for each economist?

• A) For economist Brown the AS curve is vertical and for economist Black the AS curve is horizontal.
• B) For economist Brown the AS curve is horizontal and for economist Black the AS curve is vertical.
• C) For economist Brown the AS curve is upward sloping and for economist Black the AS curve is downward sloping.
• D) For economist Brown the AS curve is downward sloping and for economist Black the AS curve is upward sloping.

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Definitions:

Production Departments

Divisions within a manufacturing company dedicated to specific production processes or tasks.

Journalize

The process of recording financial transactions in a company's journal, the first step in the accounting cycle that chronicles all financial activities.

Factory Overhead Rate

The total indirect manufacturing costs associated with production, allocated over a specific base such as labor hours or machine hours.

Machine Hours

A measure of production time used in cost accounting to allocate costs to products or services based on the time they spend being processed on a machine.