In the Macroeconomic Long Run

question 18

Multiple Choice

In the macroeconomic long run,

• A) real GDP equals potential GDP.
• B) regardless of the price level, the economy is producing at potential GDP.
• C) the economy is at full employment.
• D) All of the above are correct.

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Definitions:

Innate Releasing Mechanisms

Biological processes or structures that trigger specific behaviors in response to certain stimuli.

Environmental Stimuli

External factors or conditions in the environment that can elicit responses or reactions from organisms.

William McDougall

A psychologist known for his work in social psychology and the concept of instinct theory of motivation.

Instincts

Innate, fixed patterns of behavior in response to specific stimuli.