In macroeconomics, the long run refers to:
A) how long it takes for prices of inputs to fully adjust to changes in economic conditions.
B) the time period when sticky wages are in place.
C) how long it takes for output decisions to adjust to changes in economic conditions.
D) how long it takes for fixed inputs to become variable.

Question

Quizplus · Accepted Answer

The long run in macroeconomics refers to the time period in which all prices, including those of inputs, are fully adjustable and can respond to changes in economic conditions. In the long run, there are no fixed costs, and firms can adjust their production levels and pricing strategies as needed. Option B is incorrect because sticky wages are a feature of the short run, not the long run. Option C refers to the adjustment of output decisions, which is part of the long-run process, but not the definition of the long run itself. Option D is incorrect since fixed inputs do not become variable in the long run; rather, all inputs, whether fixed or variable, become fully adjustable.

In Macroeconomics, the Long Run Refers To