Suppose increased costs for security raised the costs of production for all firms. Explain how this would affect aggregate supply, output, and the price level in the short run and the long run.
What will be an ideal response?
The increase in costs of production would reduce aggregate supply, shifting the SRAS curve to the left. In the short run, output declines and the price level increases. Over time, the SRAS curve will shift right to restore long-run equilibrium, reducing the price level and increasing output back to its full-employment level.
You might also like to view...
If an omission of an important audit procedure is discovered, the auditor should immediately issue a disclaimer of opinion for the audit
a. True b. False Indicate whether the statement is true or false
After the oral presentation, the researcher should ________
A) help the client understand the findings B) help the client implement the findings C) evaluate the entire marketing research project D) A and B E) A, B, and C
The ________ concept holds that a company's marketing should support the best long-run performance of the marketing system
A) selling B) global marketing C) sustainable marketing D) differential marketing E) marketing
Which of the following is true about multivariable segmentation systems?
A) Marketers using multiple segmentation bases tend to ignore smaller markets. B) Marketers often use multiple segmentation bases to control inflation. C) Multiple segmentation rarely involves the use of demographic data. D) Multiple segmentation is ineffective in large markets. E) Multiple segmentation bases help identify smaller, better-defined target groups.