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

Question

Quizplus · Accepted Answer

In the short run, macroeconomic models often assume that factor prices (such as wages and rent) are fixed or exogenous, and that the levels of technology and supplies of factors of production (like labor and capital) are constant. This simplification allows for the analysis of effects on output and employment without the complicating factors of changing technology or factor supplies.

Which of the Following Are the Defining Assumptions of the Short