If the Short-Run Aggregate Supply Curve Is Horizontal, an Increase

question 85

Multiple Choice

If the short-run aggregate supply curve is horizontal, an increase in union aggressiveness that pushes wages and prices up will result in ______ prices and ______ output in the short run.

• A) higher; lower
• B) lower; higher
• C) higher; higher
• D) lower; lower

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Definitions:

Sales Commission

A sum paid to salespersons, often calculated as a fixed percentage of the sales they generate.

Product Cost Method

A method of accounting for costs that are directly associated with the production of goods, including direct materials, direct labor, and factory overhead.

Manufacturing Costs

Expenses directly related to the production of goods, including raw materials, labor, and overhead costs.

Sunk Cost

This is a cost that has already been incurred and cannot be recovered, which should not affect future business decisions.