Which of the Following Statements Is True of the Economy

question 146

Multiple Choice

Which of the following statements is true of the economy in the long run? In the long run,
I. real GDP eventually moves to potential output because all wages and prices are assumed to be flexible.
II. the economy can achieve its natural level of employment and potential output at any price level.
III. there is no cyclical unemployment.

• A) I only
• B) I and II only
• C) I and III only
• D) I, II, and III

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Definitions:

Correlational Study

A research method that examines the relationship between two variables to determine if a statistical relationship exists.

External Validity

The degree to which the findings of a research can be applied to different settings and different individuals.

Independent Variables

Variables in an experiment that are manipulated or changed by researchers to observe their effects on dependent variables.

Dependent Variable

In experimental research, it's the variable that is being tested and measured.