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.

---

Definitions:

Dualistic Thinking

A cognitive tendency to see situations and issues in polarized terms of two mutually exclusive categories, such as right/wrong or good/evil, common in early cognitive development and adolescence.

Goal-Directed Behavior

Actions taken with the intention of achieving a specific outcome or target.

Sensorimotor Period

A stage in early childhood development, according to Piaget's theory, where infants learn about the world primarily through their senses and motor activities.

Propositional Thought

Propositional thought is the ability to engage in complex reasoning and logically consider propositions and hypotheses.