Solved

The Level of Potential Output Is Treated as a Long-Run

Question 9

Multiple Choice

The level of potential output is treated as a long-run aggregate supply:


A) because the long run is the time required for adjustment in wages and prices to their equilibrium values.
B) because it appears only once every 100 years.
C) because it reflects money illusion on the part of either households, business or government.
D) because the economy cannot operate at potential output in the short run.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents