The short run in macroeconomic analysis is a period:
A) in which many production costs can be taken as fixed.
B) in which wages become fully flexible.
C) of 2 months,and the long run is more than 12 months.
D) in which interest rates are fixed.

Question

Quizplus · Accepted Answer

The short run is typically defined as a period of time in which some production costs, such as fixed capital, cannot be easily changed. Therefore, option A is correct as it correctly identifies that many production costs can be taken as fixed in the short run. Option B is incorrect because wages are typically not fully flexible in the short run. Option C is incorrect because the length of the short run can vary depending on the context and is not limited to 2 months. Option D is incorrect because interest rates can also be subject to change in the short run.

The Short Run in Macroeconomic Analysis Is a Period