According to the "Self-Correcting Mechanism" in the AD-AS Framework,________

question 33

Multiple Choice

According to the "self-correcting mechanism" in the AD-AS framework,________.

• A)the aggregate demand curve shifts up or down as needed to bring the economy to full employment
• B)the inflation rate changes as needed to move the economy along the short-run aggregate supply curve until output is at potential output
• C)the long-run aggregate supply curve shifts until it intersects both the aggregate demand and short-run aggregate supply curves at a single point
• D)inflation and expected inflation are unaffected by deviations of output from potential output
• E)none of the above

Compare and contrast the financial performance of companies across different sectors using ratio analysis.

Understand the role of operating cash flows in assessing a company’s long-term financial health and risk of default.

Recognize the potential for financial ratios to be distorted by accounting choices and practices, and identify methods for adjusting analysis accordingly.

Calculate net income using both variable costing and absorption costing methods.

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Definitions:

Year 0 Value

The initial value of an asset or investment at the starting point or inception.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to certain values.

Free Cash Flows

Funds generated by a corporation after subtracting cash spent on operational maintenance and preservation of capital assets.

Agency Relationship

A contractual relationship where one party (the principal) grants authority to another party (the agent) to act on its behalf.