The Long Run in Macroeconomic Analysis Is a Period

question 46

Multiple Choice

The long run in macroeconomic analysis is a period

• A) in which wages and some other prices are sticky.
• B) in which full wage and price flexibility and market adjustment have been achieved.
• C) greater than 12 months.
• D) in which the capital stock is held constant.

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Definitions:

ADH Release

Antidiuretic hormone (ADH) release is a process triggered by the hypothalamus that instructs the pituitary gland to release ADH into the bloodstream, which helps control the balance of water in the body.

Real Purchasing Power

The amount of goods and services that can be purchased with a unit of currency, taking into account changes in prices due to inflation or deflation.

Income Effect

The change in an individual's consumption choices resulting from a change in real income, due to price changes or income changes.

Substitution Effect

The change in consumption patterns due to a change in relative prices, causing consumers to replace pricier items with more affordable substitutes.