- CFA Exams
- CFA Exam: Level I 2021
- Study Session 4. Economics (1)
- Reading 14. Aggregate Output, Prices, and Economic Growth
- Subject 4. Aggregate Supply
CFA Practice Question
In the short run, which of the following factors is not fixed?
B. Capital
C. State of technology
D. Labor
A. Price level
B. Capital
C. State of technology
D. Labor
Correct Answer: D
User Contributed Comments 6
| User | Comment |
|---|---|
| AyshaAli | why is it not price level? |
| RichWang | Factors are capital, labor, technology. Price is not a "factor". |
| steved333 | besides that, labor is always a variable cost, so it must be the answer. |
| viruss | Think about the primary response of companies during a recession : they lay down people ... |
| NikolaZ | Sticky prices - prices are ALWAYS fixed in the short run, if there is a shock in the market it takes time for the prices to adjust (retailers need to change prices, information, communication costs, etc.) |
| Yrazzaq88 | Price level is fixed because, if we remember, the SRAS has a horizontal curve.... Leaving the price fixed. |