If There Is an Aggregate Demand Shock, the IS Curve

question 58

True/False

If there is an aggregate demand shock, the IS curve shifts right.

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Definitions:

Incremental Costs

Additional costs associated with producing one extra unit of a product or delivering an additional service.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced to the finished product.

Direct Labor

The cost of labor that can directly be associated with the production of goods or services.

Overhead

Indirect costs related to production or operations, excluding direct labor and direct materials costs.