Which of the following are the defining assumptions of the long 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 have fully adjusted to output gaps,and technology and factor supplies are changing.
E)Factor prices are exogenous,technology and factor prices are exogenous.

Question

Quizplus · Accepted Answer

In the long run, factor prices have fully adjusted to output gaps, and technology and factor supplies are changing, reflecting a state where the economy is at full employment and potential output can grow due to technological progress and changes in factor supplies.

Which of the Following Are the Defining Assumptions of the Long