When we study the adjustment process in macroeconomics,we are analyzing the process by which
A)potential output is adjusting to changes in factor supplies.
B)potential output is adjusting to changes in technology.
C)real GDP returns to the level of potential output.
D)real GDP expands over time.
E)changes in technology affect the level of real GDP.

Question

Quizplus · Accepted Answer

The adjustment process in macroeconomics refers to the process by which real GDP returns to the level of potential output. This can occur through changes in prices, wages, and other input costs in response to fluctuations in aggregate demand and supply. It is important for the economy to be able to adjust to these changes in order to maintain stability and avoid long-term imbalances.

When We Study the Adjustment Process in Macroeconomics,we Are Analyzing