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Eduardwww [97]
3 years ago
6

Suppose the economy is initially at point A. Now suppose an increase in government purchases shifts the aggregate demand curve t

o AD2. Which of the following statements best explains how the economy responds to restore long-run macroeconomic equilibrium?
Choose one answer.
a. The increase in the price level to Pbreduces real GDP demanded, shifting the aggregate demand curve back to AD1, returning the economy to its potential output at A.
b. Firms produce more in anticipation of future higher prices, thus shifting the SRAS curve upward until the gap is eliminated at D.
c. Firms and workers will negotiate higher nominal wages to restore lost purchasing power. This shifts the SRAS curve to the left until the gap is eliminated at D.
d. The increase in the price level to Pbdecreases consumption which in turn leads firms to cut production shifting the SRAS curve to the left until the gap is eliminated at D.
Business
1 answer:
UkoKoshka [18]3 years ago
7 0

Answer:

C. Firms and workers will negotiate higher nominal wages to restore lost purchasing power. This shifts the SRAS curve to the left until the gap is eliminated at D.

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3 years ago
The price of a dozen roses in the United States is about $30. If $0.559 U.S. dollars can purchase 1.00 Turkish Lira, how much do
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$53.67

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On April 1, Robert LLC purchased two units of inventory, A and B. The cost of unit A was $655, and the cost of unit B was $575.
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Answer:

Cost of Goods Sold 70 Inventory 70

Explanation:

For recording the inventory in the book of accounts, we consider the cost or net realizable value whichever is lower

According to the question, the inventory unit for A would be recorded at $655, and the inventory unit for B would be recorded at $505 as these reflect the lower cost.

The journal entry is shown below:

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(Being adjusted entry recorded)

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