The long run in macroeconomic analysis is a period
A) in which wages and some other prices are sticky.
B) in which full wage and price flexibility and market adjustment have been achieved.
C) greater than 12 months.
D) in which the capital stock is held constant.

Question

Quizplus · Accepted Answer

The long run in macroeconomic analysis is a period in which full wage and price flexibility and market adjustment have been achieved. In the long run, all prices and wages are fully flexible, all markets are in equilibrium, and there are no frictions or constraints on economic behavior. Therefore, option B is the best choice.

The Long Run in Macroeconomic Analysis Is a Period