Which of the Following Is Occurring as the Macro Economy

question 107

Multiple Choice

Which of the following is occurring as the macro economy is adjusting from the short run to the long run?

• A)Wages and other factor prices are adjusting to close output gaps.
• B)Potential output is adjusting to close inflationary or recessionary gaps.
• C)Wages and other factor prices remain constant.
• D)Aggregate demand shocks are causing deviations from potential output.
• E)Aggregate supply shocks are causing deviations from potential output.

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Definitions:

Implicit Costs

The opportunity costs of resources already owned by the firm and used in business, for which no cash payment is made.

Price-Discriminating

A pricing strategy where a seller charges different prices for the same product or service to different customers, based on factors like buyer's age, location, or purchase history.

Elastic Demand

A situation in which the demand for a product is highly responsive to changes in its price.

Arbitrage

The practice of profiting from a price difference between two or more markets, transferring a commodity or financial instrument from a lower-priced market to a higher-priced one.