AD - AS Shocks

question 72

Multiple Choice

AD - AS Shocks
-In the long run,following a combination of a negative demand shock and a temporary negative supply shock,________.

• A)both inflation and output return to the original long-run equilibrium values
• B)inflation is permanently increased,while output returns to potential output
• C)output returns to potential output,while inflation may be higher or lower than its initial value
• D)inflation is permanently reduced,while output returns to potential output
• E)none of the above

Recognize the importance of proper journal entries in capturing transactions related to liabilities and contingencies.

Understand the components and classification of fixed assets.

Recognize the importance and components of capital and revenue expenditures.

Comprehend the concept and process of depreciation, including methods and calculations.

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Definitions:

Break-even Quantity

The number of units that must be sold to cover all costs, resulting in neither profit nor loss.

Administrative Costs

Expenses related to the general operation of a business, such as office supplies and salaries of non-sales personnel.

Labor Cost

Refers to the total expense incurred by employers for the compensation of their workforce, including wages, benefits, and taxes.

Materials Cost

The total expense to an entity for all materials used in the production of a product or service.