The long run is a period of time when
A) the economy is a full employment.
B) all prices have adjusted to equilibrium prices.
C) Adam Smith's invisible hand works well.
D) the economy is at potential GDP.
E) all of the above are true.

Question

Quizplus · Accepted Answer

In the long run, the economy is considered to be at full employment, all prices have adjusted to equilibrium, Adam Smith's concept of the invisible hand guiding economic resources to their most efficient uses is fully operational, and the economy operates at its potential GDP. These conditions reflect a state of general economic equilibrium and efficiency.

The Long Run Is a Period of Time When