Answer:[tex]67500[/tex]
The right solution is "13,675 U".
Explanation:
According to the question,
The standard material cost will be:
= [tex]25000\times (\frac{90000}{30000} )\times 0.90[/tex]
= [tex]25000\times 30000\times 0.90[/tex]
= [tex]67,500[/tex]
The actual material cost will be:
= [tex]95500\times 0.85[/tex]
= [tex]81,175[/tex]
hence,
The total material price variance will be:
= [tex]Actual \ cost - Standard \ cost[/tex]
= [tex]81175-67500[/tex]
= $[tex]13,675[/tex] (Unfavorable)
The ______ inventory system records all inventory-related transactions in the inventory account (e.g. transportation, purchase returns and allowances, purchase returns and allowances, purchase discounts) and reduces inventory at the time of sale. The ______ inventory system uses separate accounts for these items and records cost of goods sold at the end of the accounting period.
Zoe's Dog Biscuits, inc, has net cash flows from operating activities for the last year of $226 million. The income statement shows that net income in $150 million and depreciation expense is $85 million. During the year, the change in inventory on the balance sheet was an increase of $14 million, change in accrued wages and taxes was an increase of $15 million and change in accounts payable was an increase of $10 million. At the beginning of the year the balance of accounts receivable was $45 million. What was the end of year balance for accounts receivable?
A. $20 million
B. $25 million
C. $45 million
D. $65 million
Answer:
D. $65 million
Explanation:
The computation of the end of year balance for accounts receivable is shown below:
Cash flows from operating activities $226
net income $150
Add: depreciation $85
Less: increase in inventory -$14
Add: increase in wages and taxes $15
Add: increase in account payable $10
Total $246
Change in account receivable -$20
Opening account receivable $45
Ending account receivable $65
You pull credit on a husband and wife. It turns out their debt-to-income ratio is too high. You notice the majority of the debts belong to the husband. You also note that the wife has enough income to qualify on her own. You remove the husband from the loan, with permission from the borrower, submit the file, and receive approval. This action is:
Answer:
This action is legal and ethical (except for communal property sales)
Explanation:
Scenarios do occur where one borrower brings down the entire loan filed. if the other borrower can take on the loan burden, then there is a way.
Absolutely nothing wrong with finding a way to qualify your borrowers request for a loan as long as they are ok with it. Most of the money in the joint assets account belongs to the non-borrower. The lender requires two months of bank statements as therefore, documentation is needed by the lender that requires you to disclose and document deposits for the borrower and non-borrower.
This method cannot work in a communal property state
Roger Company sold machinery for a total price of $20,000 to be paid in four equal installments, plus interest. The first payment was made in the current year. The original cost of the machinery was $12,000 and $8,000 of depreciation had been taken on it. Ignoring interest income, what amount of income must Roger Company recognize in the current year under the installment method for this sale
Answer:
$8,000 ordinary income and $2,000 capital gain.
Explanation:
Calculation to determine what amount must Roger recognize in the current year
Since total gain is $16,000 calculated using this formula
Total gain=Selling price-Basis
Total gain=$20,000-$4,000
Total gain=16,000
Which means that he must recognize the complete $8,000 . Hence, the revised gain of $8,000 will be the ORDINARY INCOME in the current year which is calculated as:
Ordinary Income=Selling price-Adjusted basis
Ordinary Income=$20,000-$12,000
Ordinary Income=$8,000
Lastly is to determine The gross profit percentage of which will be applied to each using this formula
Gross profit percentage=Gross profit ÷Contract price
Gross profit percentage=$8,000 ÷ $20,000
Gross profit percentage=40%
Hence, the CAPITAL GAIN for the current year will be:
Capital gain = [($20,000 ÷ 4) × 40%]
Capital gain=$2,000
Therefore the amount that Roger must recognize in the current year is $8,000 ordinary income and $2,000 capital gain.
In considering the issue of distribution intensity (i.e., how many intermediaries a manufacturer will go through to distribute its goods to end-user consumers), Taza Chocolate __________. a.Uses intensive distribution exclusively. b.Uses selective distribution exclusively. c.Balances intensive distribution with selective distribution. d.Uses neither intensive distribution nor selective distribution.
Answer:
c.Balances intensive distribution with selective distribution.
Explanation:
In the case when there is an issue of a distribution intensity means no of intermediaries at which the manufactured would go through the distribution of goods for the end consumers so here the company used the intensive distribution that should be balance with the selective distribution
So as per the given situation, the option c is correct
New Jersey-based Integra LifeSciences elected not to use personality tests to screen job applicants for achieving employee/company fit as the company was in a transition phase. It, however, was open to using personality tests in the future when the company would have gained some stability. In this case, which of the following, if true, would support this tentative decision of using personality tests?
a. Personality tests make applicants provide socially desirable responses.
b. Personality tests can categorize people and make them seem inflexible for adaptation to new changes taking place in an organization
c. Personality tests only work best when they are conducted in real settings or in believable circumstances
d. Personality tests usually result in biased outcomes Chart to Work to remaining)
Answer:
b. Personality tests can categorize people and make them seem inflexible for adaptation to new changes taking place in an organization
Explanation:
A personality test can be defined as a means of assessing and defining peoples personalities. Such tests involves using certain techniques to measure the different traits and patterns that people show at different situations that may arise.
in this question, based on the fact that this organization is in a transitional stage, it is best that they do not use a personality test. A personality test would only put the workers in categories, that is it would only settle them for just a particular role. putting them in categories is just like telling them that they can only fit into one role in the organization. so there would be no flexibility.
Joe has an idea for a new mobile restaurant business. He wants to convert an antique bus into a sit-down restaurant with a service window allowing him to serve people within the bus and walk-ups who want to get their food and take it home. Joe takes his idea and looks at the people, the offerings, the customers, the value proposition, and his distinctive competencies. Joe is performing a(n) ______
A. business model canvas
B. RBI screen
C. classic feasibility study
D. pilot test
Answer:
C. classic feasibility study
Explanation:
A feasibility study is the study that shows the analysis made for considered the relevant factors for a project. It included the economic, technological, legal in order to ascertain the completion of the project in a successful manner
So as per the given situation, the option c is correct
And, the same is to be considered
Concern for the environment among consumers causes consumers to substitute away from traditional autos to electric-powered autos.
Equilibrium quantity: Increases / Decreases
Equilibrium price: Increases / Decreases
Answer:
the equilibrium price and quantity of traditional autos decreases
the equilibrium price and quantity of electric cars increases
Explanation:
Due to the decrease in demand for traditional autos, there would be a leftward shift of the demand curve for traditional autos. As a result, equilibrium price and quantity would fall.
Due to the increase in demand for electric-powered autos, there would be a rightward shift of the demand curve for traditional autos. As a result, equilibrium price and quantity would increase.
Please check the attached images for graphical illustrations
One advantage of ______ is the direct crossing of trades without using a broker-dealer system eliminates the bid-ask spread that otherwise would be incurred. Multiple choice question. ECNs Direct Search Markets Broker Markets Dealer Markets
Answer:
ECNs (electronic communication network)
Explanation:
An electronic communication network can be regarded as computerized system which is designed to matches buyers as well as sellers orders automatically for securities so trading can take place in the market. ECN trading is designed to favor investor that are in different geographic areas , but want to have a complete aand secure transaction with absence of any
third party. It should be noted that One advantage of ECNs is the direct crossing of trades without using a broker-dealer system eliminates the bid-ask spread that otherwise would be incurred
Agent Smith showed a buyer a listing. The laws in the state require the agent to do an agency disclosure before showing a listing and showing a house to a prospective purchaser creates an agency relationship. If Agent Smith did not use an agency disclosure, and there is no written buyer agency agreement, but Agent Smith showed the listing anyway, what term would best describe the agency relationship
Answer:
Implied agency
Explanation:
Agency
This is simply known as a form of
relationship between two parties in that the principal hires another person to represent him or her.
An agency relationship can be created with 2 types of agreements between the parties. They are
1. Express agency
2. Implied agency
Express agency
This is simply known as a formal contractural agreement. It can be in an oral or written format.
Implied agency
This is often regarded as an implied agreement. It is an agency which is created through the actions of the parties, instead of an express agreement. It is also called Ostensible agency.
Listing Agreement
This is simply defined as written employment contract which gives right to the broker to find a buyer or a tenant for the owner's property.
Andrea, a sales associate in the fine china department of the David's Department Store, reports to Chris, the home furnishings department manager. This morning, Chris asked Andrea to change the price tags on the crystal wine glasses. While working on this task, Pietro, the bedding department manager, told Andrea that he wanted her to unload some comforters. To solve this conflict, Andrea turns to the principle of unity of command under which Group of answer choices Andrea needs to decide which manager has more power. Andrea can refuse to do both tasks. employees should report to no more than one manager. employees can report to two managers, so Andrea needs to decide whose directions to follow. Andrea will need to determine how she can multitask.
Answer: employee should report to no more than one manager.
Explanation:
Under the principles of war, it should be noted that the unity of command simply means that all the responsibility of all the forces are under one commander. The commanders possesses the authority to direct and control all the forces in order to achieve q common goal.
Therefore, in this scenario, Andrea should report to Chris who is the home furnishings department manager since Chris is his immediate manager as he can only follow the order of one boss.
The formula for the production budget is budgeted sales in units plus desired ending merchandise inventory less beginning merchandise inventory. beginning finished goods units less desired ending finished goods units. desired ending direct materials units less beginning direct materials units. desired ending finished goods units less beginning finished goods units.
Answer:
desired ending finished goods units less beginning finished goods units.
Explanation:
production budget can be regarded as budget that gives the calculation of the number of units of particular products which is needed to be manufactured, this is comprises the sales forecast as well as amount of finished goods inventory that is planned to have on hand.
It should be noted that the formula for the production budget is desired ending finished goods units less beginning finished goods units..
The government has adopted an emissions tax if it: Group of answer choices specifies the type of catalytic converter that must be used to reduce automobile emissions. pays automobile drivers 10 cents for each 10% reduction in automobile emissions. charges automobile drivers 10 cents for each unit of automobile emissions. transfers the ownership of city air to a private firm that charges automobile drivers a profit-maximizing price, based in part on the pollution capacity of the atmosphere.
Answer:
charges automobile drivers 10 cents for each unit of automobile emissions.
Explanation:
Pollution can be defined as the physical degradation or contamination of the environment through an emission of harmful, poisonous and toxic chemical substances.
Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.
An emission tax can be defined as tax levied on manufacturers or road users such as drivers for the amount of pollution dispersed into the environment.
Hence, the government has adopted an emissions tax if it charges automobile drivers 10 cents for each unit of automobile emissions.
On December 31, it was estimated that goodwill of $3,867,800 was impaired. In addition, a patent with an estimated useful economic life of 13 years was acquired for $468,000 on April 1. A. Journalize the adjusting entry on December 31 for the impaired goodwill. Refer to the Chart of Accounts for exact wording of account titles. B. Journalize the adjusting entry on December 31 for the amortization of the patent rights. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
A. Dr Loss from Impaired Goodwill $3,867,800
Cr Goodwill $3,867,800
B. Dr Amortization Expense—Patents $27, 000
Cr Patents $27,000
Explanation:
a. Preparation of the adjusting entry on December 31 for the impaired goodwill
Dec. 31
Dr Loss from Impaired Goodwill $3,867,800
Cr Goodwill $3,867,800
(To reocord Impaired goodwill)
b.Preparation of the adjusting entry on December 31 for the amortization of the patent rights.
Dec. 31
Dr Amortization Expense—Patents $27, 000
Cr Patents $27,000
[($468,000 ÷ 13) × 9/12]
(To record Amortized patent rights)
5
Select the correct text in the passage.
What is the opportunity cost in this scenario?
Mikael has saved $4,000 for his trip to Brazil. He has calculated that his total transportation expenses will be $1,000. The hotel will cost him
another $1,500. He will spend about $500 on food. He plans on spending the remaining $1,000 for sightseeing and buying souvenirs.
While booking his plane ticket, he realizes that the price has gone up. His total transportation expenses will go up by $200. He realizes that he
cannot cancel his hotel reservation. He also doesn't want to go cheap on food. Finally, he decides to give up visiting the popular Ouro Preto
during his stay in Brazil.
Reset
Next
Answer: sightseeing
Explanation:
Opportunity costs represent to the potential benefits that an economic entity misses out on when another alternative is chosen over another.
In this case, due to the increase in the price of the plane ticket, Mikael decides to give up visiting the popular Ouro Preto during his stay in Brazil even though it was earlier planned. Therefore, it can be infered that sightseeing is the opportunity cost as that is what he forgoes in order to choose a different alternative.
Ricardo's theory of _____ advantage states that it makes sense for a country to specialize in the production of those goods that it produces most efficiently and then purchase the goods that it produces less efficiently from other countries, even if this means buying goods from other countries that it could produce more efficiently itself.
Answer:
comparative
Explanation:
A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.
For example, country A produces 10kg of beans and 5kg of rice. Country B produces 5kg of beans and 10kg of rice.
for country A,
opportunity cost of producing beans = 5/10 = 0.5
opportunity cost of producing rice = 10/5 = 2
for country B,
opportunity cost of producing rice = 5/10 = 0.5
opportunity cost of producing beans = 10/5 = 2
Country A has a comparative advantage in the production of beans and country B has a comparative advantage in the production of rice
Country A should specialise in the production of beans and country B should specialise in the production of rice
A credit sale of $2,500 to a customer would result in:A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable ledger. A debit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable ledger. A credit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable ledger. A credit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable ledger.
Answer:A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable ledger.
Explanation:
In Recording a Credit Sale in the general Ledger, the following should be made
Account Debit Credit
Accounts receivable $2,500
Sales revenue $2,500
In Recording a Credit Sale in the accounts receivable ledger, the following should be made
Account Debit Credit
Cash(Customer's account) $2,500
Accounts receivable $2,500
Therefore, A credit sale of $2,500 to a customer would result in A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable ledger
what is the final step in marketing a product?
Answer:
Positioning: The final step is to position your product in a way that will appeal to the needs of your target audience and encourage them to buy your product.
Niat ny mau bikin dua akun tapi malah kesasar :(
Answer:
I'm lost and I don't understand your language
In strategic management, both the short-term and long-term perspectives need to be considered because a. the creative tension between the two forces managers to develop more successful strategy. b. shareholders only care about long-term returns c. shareholder value is only measured by short-term returns. d. long-term vision precludes the analysis of present operating needs.
Answer:
a. the creative tension between the two forces managers to develop more successful strategy.
Explanation:
It is correct to say that short-term and long-term strategies must be designed individually as the creative tension between the two forces managers to develop more successful strategies.
It is essential that in strategic planning the short-term and long-term action plans are well specified, so that the strategic development understands the organizational whole and the strategies are aligned, since the short-term actions will consequently impact those of long term.
If a nation has a comparative disadvantage in the production of some commodity: Group of answer choices it cannot gain from international trade unless it has an absolute advantage in every other commodity. it can gain from international trade in that commodity only if it has an absolute advantage in that commodity. it cannot gain from international trade in the commodity. it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically.
Answer:
it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically.
Explanation:
A country has comparative disadvantage in production if it produces at a higher opportunity cost when compared to other countries.
The country with a comparative disadvantage can gain from trade by trading the good with a country that has comparative advantage in the production of that good. i.e. the country produces at a lower opportunity cost
For example, country A produces 10kg of beans and 5kg of rice. Country B produces 5kg of beans and 10kg of rice.
for country A,
opportunity cost of producing beans = 5/10 = 0.5
opportunity cost of producing rice = 10/5 = 2
for country B,
opportunity cost of producing rice = 5/10 = 0.5
opportunity cost of producing beans = 10/5 = 2
Country B has a comparative disadvantage in the production of beans and country A has a comparative disadvantage in the production of rice
Country B should buy beans from A and A should buy rice from B
Sparrow Corp purchased 90% of the stock of Warbler Corp 8 yrs ago for $1M. Sparrow liquidates Warbler and acquires assets with a basis to Warbler of $850K (FMV $1.2M). Sparrow will have a basis in the assets of $850K, and no recognized gain or loss. True or False
Answer:
True
Explanation:
Given that
Sparrow corp purchased 90% of the stock for $1 million at 8 years ago also it purchased the assets of $850K of this the fair market value is $1.2M And there is the basis in the asset of $850K
Since the asset was purchased of $850K and there is the basis of the asset i.e. of $850K
So there is no recognized gain or loss
hence, the given statement is true
"I don't know, but I'll find out" is a customer service example of…
B a dangerous admission.
C losing a sale.
D magic words.
A(Not the answer) an uninformed sales rep.
Answer:
C. losing a sale.
Explanation:
CRM is an acronym for customer relationship management and it typically involves the process of combining strategies, techniques, practices and technology so as to effectively and efficiently manage their customer data in order to improve and enhance customer satisfaction.
Simply stated, it's a strategic process which typically involves collecting customer information for the purpose of improving a customer's future experience.
Therefore, this set of employees are saddled with the responsibility of ensuring the customer are satisfied and happy with their service at all times.
A salesperson can be defined as an individual or employee who is saddled with the responsibility of taking orders from customers, as well as sales of finished goods and services to consumers or end users.
A lost sale can be defined as a situation in which a salesperson or business firm looses a selling opportunity for a variety of reasons such as going out of stock, unavailability of a brand (product line), lack of product knowledge, etc.
This ultimately implies that, a process in which a salesperson looses a sales opportunity due to one reason or the other is referred to as losing a sale.
Hence, "I don't know, but I'll find out" is a customer service example of losing a sales because the customer (buyer) may not be patient enough to get the feedback while others might walk away immediately in search of the product or service elsewhere.
Answer:
It is magic words
Explanation:
I took the test got it right
please help me with this account question I'm tryna make entries
Answer:
451
Explanation:
430+21
1234567890101112131415
During the Great Depression, a. the pineapple industry finally became highly profitable as world demand for fruits rose. b. Latin America developed a mature regional economy, which exported large quantities of manufactured goods and imported most of its foodstuffs and raw materials. c. revolutions occurred all over Latin America. d. Latin American economies boomed, in contrast to those of the United States and Europe. e. domestic instability led to the creation of dictatorships.
Answer:
e. domestic instability led to the creation of dictatorships.
Explanation:
The Great Depression was a period of severe economic meltdown or downturn (crisis) of the industrialized world and it started from the United States of America, typically lasting for about ten years (1929-139).
Basically, the Great Depression started in America on the 4th of September, 1929 as a result of a major fall in the prices of stocks and consequently, leading to a stock market crash on the 29th of October, 1929.
Hence, the negative effects of the Great Depression includes a decline in investments, tax revenues, market price, personal income level, consumer spending, profits and a general rise in unemployment rate.
During the Great Depression, domestic instability led to the creation of dictatorships and autocratic leaderships (government) across many countries.
Generally, dictatorship is characterized by a single leader (dictator) having absolute power and as such he or she makes all the rules, policies and decisions without consulting or taking suggestions from anyone else.
Franchising involves ______. Multiple choice question. professionally managed and centrally coordinated channels designed to achieve economies and maximize impact one firm's marketing channel being used to sell another firm's products a contractual arrangement between a parent company and another entity that is allowed to operate a business under an established name a channel member bypassing another member to sell or buy product directly
Answer:
a contractual arrangement between a parent company and another entity that is allowed to operate a business under an established name.
Explanation:
Franchise is a license consisting of a contractual arrangement between a parent company and another, that allows individuals or an organization access to its knowledge, processes, trademarks in order to provide a service.
One of the main advantages of a franchise is that, franchisers such as McDonald do not require additional capital and development expenses to have their businesses being situated in a foreign market or country, as they only required to issue licenses to franchisors who are interested in being part of their business by paying a fee.
Hence, franchise is a license that allows individuals or group of people knowledge, processes, trademarks to provide a service.
In conclusion, franchising involves a contractual arrangement between a parent company and another entity that is allowed to operate a business under an established name
Charley spends all of his income on soft drinks and pizza. Suppose he is currently buying these products in amounts such that his marginal benefit from an additional soft drink is and his marginal benefit from an additional slice of pizza is . If the price of a soft drink is and the price of a slice of pizza is , is Charley maximizing his total benefits? A. No, he should increase his consumption of both goods. B. No, he should shift consumption toward and away from to maximize total benefits. C. Yes, there is no other consumption choice that will make his total benefits greater. D. No, he should shift consumption toward and away from to maximize total benefits.'
Answer:
The correct option is B. No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.
Explanation:
Note: This question is not complete because some important figures and points are missing in it. These figures and points are therefore provided to complete the question before answering it as follows:
Charley spends all of his income on soft drinks and pizza. Suppose he is currently buying these products in amounts such that his marginal benefit from an additional soft drink is $100 and his marginal benefit from an additional slice of pizza is $110. If the price of a soft drink is $2 and the price of a slice of pizza is $3, is Charley maximizing his total benefits?
A. No, he should increase his consumption of both goods.
B. No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.
C. Yes, there is no other consumption choice that will make his total benefits greater.
D. No, he should shift consumption toward pizza and away from soft drinks to maximize total benefits.'
The explanation of the answer is now provided as follows:
Under utility maximization theory, the condition for the utility or benefit maximization for two goods is as follows:
MBs / Ps = MBp / Pp ……………………………. (1)
Where:
MBs = Marginal benefit from an additional soft drink = $100
MBp = Marginal benefit from an additional slice of pizza =$110
Ps = Price of a soft drink = $2
Pp = Price of a slice of pizza = $3
Subtitling the relevant values, we have:
MBs / Ps = Marginal utility per dollar spent on soft drinks = $100 / $2 = 50
MBp / Pp = Marginal utility per dollar spent on soft pizza = $110 / $3 = 36.67
This implies that 50 = MBs / Ps > MBp / Pp = 36.67
The decision rule is that the limited money income should be spent by a consumer on the good which gives the higher marginal utility per dollar in order to maximize marginal benefit.
Since 50 = MBs / Ps > MBp / Pp = 36.67 above, this implies that Charley is NOT maximizing his total benefits. To maximize his total benefits, Charley should consume more of soft drinks and less of pizza until the condition is consistent with equation (1).
Therefore, the correct option is B. No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.
A company purchased two identical items. Item 101 purchased in October cost $100. Item 102 purchased in November cost $110. The business uses the Last-in, first-out (LIFO) cost flow method. If item 101 is sold to a customer, the amount assigned to cost of goods sold is ______.
Answer:
$110
Explanation:
LIFO means last in first out. It means that its the last purchased inventory that is the first to be sold.
If the LIFO method is used, the cost of goods sold would be the cost of purchasing inventory 102 which was the inventory that was purchased last.
The cost of inventory 102 is 110
G free ltd intends reducing the number of suppliers they use by 50% analyse how reducing the number of suppliers could imporve g-free lts future operational performance
Answer:
It has to buy gluten free raw material to retains its customers because customers are willing to pay premium price for this feature. If there will be few supplier at G-Free Ltd will be able to focus on maintaining better and long term relationship with them.
Explanation:
G-Free Ltd has intended to reduce number of suppliers to improve its operational performance. It can grow its business and save cost from buying in bulk from a few suppliers. There will be less risk for procurement of raw material with gluten because there only few suppliers who will be providing raw material.
Identify the correct statement. Group of answer choices An increase in the price level in an economy will decrease the real GDP demanded along the aggregate demand curve. An increase in the price level in an economy will increase the real value of dollar-denominated assets. An increase in the price level in an economy will shift the aggregate demand curve rightward. An increase in the price level in an economy will shift the aggregate expenditure line upward. An increase in the price level in an economy will decrease the equilibrium level of output demanded.
Answer:
An increase in the price level in an economy will decrease the real GDP demanded along the aggregate demand curve.
Explanation:
In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.
In order to understand both short-run economic fluctuations and how the economy move from short to long run, we need the aggregate supply and aggregate demand model.
Aggregate demand (AD) can be defined as the total quantity of output (final goods and services) that is demanded by consumers at all possible price levels in an economy at a particular time.
Generally, an increase in the price level in an economy will decrease the real GDP demanded along the aggregate demand curve.
Additionally, an economy's aggregate demand curve shifts rightward or leftward by more than changes in initial spending because of the multiplier effect. Also, an increase in stock prices that increases consumer wealth will most likely shift the aggregate demand curve to the right.
Lastly, a change in price level would not shift the aggregate demand curve (AD curve).
