The long run in macroeconomic analysis is a period:
A) in which wages and some other prices are sticky.
B) in which prices and nominal wages are flexible.
C) longer than one year.
D) in which the capital stock is held constant.

Question

Quizplus · Accepted Answer

The long run is a period in which prices and nominal wages are flexible, meaning they can adjust to changes in supply and demand without being constrained by short-term factors such as production capacity or available inputs. This allows for full employment and efficient allocation of resources.

The Long Run in Macroeconomic Analysis Is a Period