In the Short Run,________

question 43

Multiple Choice

In the short run,________.

• A)cost push shocks can cause firms to raise prices
• B)workers pushing for higher wages may lead to increases in inflation
• C)the aggregate supply curve may shift to the left with increases in expected inflation
• D)all of the above
• E)none of the above

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Definitions:

Productive Efficiency

A situation where an economy or firm produces goods at the lowest possible cost, utilizing all its resources efficiently without waste.

Monopolistic Competition

A market framework where multiple companies distribute products that are akin to each other but not copies, thus granting them a degree of power within the market.

Excess Capacity

A situation where a company or economy can produce more goods or services than currently demanded, often leading to inefficiency and lower prices.

Excess Capacity

A scenario where a firm or industry has unused production resources, leading to inefficiencies and lowered profitability.