Consider an AD/AS Model in Long-Run Equilibrium

question 64

Multiple Choice

Consider an AD/AS model in long-run equilibrium.An output gap,caused by a leftward shift of the AD curve,will be eliminated if

• A)wages rise quickly.
• B)the AS curve shifts upward.
• C)wages and other factor prices fall sufficiently.
• D)real national income decreases.
• E)prices rise quickly.

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Definitions:

Generally Accepted Accounting Principles

A set of accounting standards, principles, and procedures that companies use to compile their financial statements.

Liability-Revenue Account Relationship

The connection between liabilities and revenues, typically involving situations where revenue is earned as liabilities are settled.

Unearned Rent Revenue

A liability account representing the advance payment of rent by tenants that has yet to be earned by the property owner.

Balance Sheet Accounts

Balance Sheet Accounts represent the accounts that are reported on the balance sheet and include assets, liabilities, and shareholders' equity accounts.