The Assumption That in the Long Run Prices and Wages

question 88

Multiple Choice

The assumption that in the long run prices and wages are fully flexible implies that the long-run aggregate supply curve is determined by ________.

• A)capital and labor inputs
• B)technology
• C)the natural rate of unemployment
• D)all of the above
• E)none of the above

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Definitions:

Conversion Costs

Costs incurred during the transformation of raw materials into finished goods, typically including labor and overhead expenses.

Equivalent Units

A measure used in costing inventories under the process costing system, converting partially completed units into a number of equivalent full units.

Work In Process Inventory

The valuation of partially finished goods that are still in the production process at the end of an accounting period.

First-In, First-Out

An inventory valuation method where the oldest inventory items are recorded as sold first, reflecting the flow of goods.