In the Economic Fluctuations Model, the So-Called Short Run Normally

question 118

Multiple Choice

In the economic fluctuations model, the so-called short run normally refers to

• A)the first couple of days after a shock to aggregate demand.
• B)the first month after a shock to aggregate demand.
• C)the initial departure of real GDP from potential GDP after a shock to aggregate demand.
• D)the time it takes for a full recovery to take place after a shock to aggregate demand.
• E)None of these

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Definitions:

Division of Labor

The assignment of different parts of a manufacturing process or task to different people to improve efficiency.

Specialized Tasks

Distinct components of a job designed to be performed by individuals with specific skills or training, often to increase efficiency.

Coincidence of Wants

In barter economies, this refers to the situation where two parties each possess an item the other wants, making an exchange possible without the need for money.

Medium of Exchange

An intermediary used in trade to avoid the inconveniences of a pure barter system.