CFA Practice Question

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CFA Practice Question

In the short run, which of the following factors is not fixed?

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.
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