The economy enters the long-run once
A)nominal wages become equal to real wages.
B)real wages become equal to nominal wages.
C)sufficient time has elapsed for wage contracts to expire and nominal wages to adjust to output-price changes.
D)sufficient time has elapsed for real GDP to increase and unemployment to decrease as a consequence

Question

Quizplus · Accepted Answer

In the long run, nominal wages adjust to changes in the price level, allowing the economy to reach its natural level of output where all resources are fully utilized.

The Economy Enters the Long-Run Once