Which of the following characteristics define the short run in macroeconomics?
A)Factor prices are exogenous, technology and factor prices are endogenous.
B)Factor prices adjust to output gaps, and technology and factor supplies are constant.
C)Factor prices are exogenous, and technology and factor supplies are changing.
D)Factor prices are exogenous, and technology and factor supplies are constant.
E)Factor prices adjust to output gaps, and technology and factor prices are changing.

Question

Quizplus · Accepted Answer

In the short run, factor prices are typically assumed to be exogenous and fixed, while technology and factor supplies are assumed to be constant. This allows for analysis of the effects of changes in demand or output on the economy without having to consider changes in the underlying factors of production.

Which of the Following Characteristics Define the Short Run in Macroeconomics