According to the Short-Run Aggregate Supply Curve,if Output Minus Potential

question 47

Multiple Choice

According to the short-run aggregate supply curve,if output minus potential output equals zero,then ________.

• A)unemployment might be zero
• B)inflation might be stable
• C)expected inflation must be stable
• D)price shocks must be zero
• E)none of the above

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Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of output or sales.

Variable Costs

Costs that change in proportion to the level of production or sales activity.

Direct Labor Budget

An estimation of the cost and amount of labor required for production or services, included within a company's overall budget planning.

Wage Rate

The amount of money paid to an employee per unit of time or per unit of output, which can be influenced by several factors including industry, occupation, and geographical location.