In terms of aggregate supply, a period in which nominal wages and other resource prices are fully responsive to price-level changes is called the
A) long run.
B) short run.
C) immediate market period.
D) very long run.

Question

Quizplus · Accepted Answer

The period in which nominal wages and other resource prices are fully responsive to price-level changes is called the long run. In the long run, all inputs can be adjusted and there are no fixed factors of production. As a result, firms can adjust their production levels in response to changes in prices without facing any constraints on their production process. This allows for full adjustment of supply to changes in demand and prices, resulting in a vertical long-run aggregate supply curve.

In Terms of Aggregate Supply, a Period in Which Nominal