In the Basic AD/AS Model,which of the Following Is a Defining

question 1

Multiple Choice

In the basic AD/AS model,which of the following is a defining assumption of the adjustment process that takes the economy from the short run to the long run?

• A)factor supplies are assumed to be varying
• B)technology used in production is endogenous
• C)the level of potential output is changing
• D)factor prices respond to output gaps
• E)firms cannot operate near their normal capacity

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Definitions:

Lease Payments

Lease payments are regular payments made by a lessee to a lessor for the use of an asset, such as property or equipment, over a specified lease term.

Annual Payment

A payment made once a year, often referring to the total amount paid over a twelve-month period for a particular expense.

Desired Sum

An intended total amount or goal that one aims to achieve through calculation or accumulation.

Single Sum

A financial calculation used to find the future value of a lump sum investment.