The Level of Aggregate Output Is Determined in the Short

question 51

Multiple Choice

The level of aggregate output is determined in the short run by but in the long run by the level of .

• A)the output gap; factor productivity
• B)the AD and AS curves; Y*
• C)the AS curve; potential output
• D)the AD curve; interest rates
• E)the AD and AS curves; factor utilization

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Definitions:

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values deviate from the mean on average.

Perfectly Positively Correlated

A statistical term describing two variables that move in the same direction with a correlation coefficient of +1, indicating a perfect positive linear relationship.

Cycle Inventory

Inventory that a company holds to meet its normal sales operations, varying over the course of an operating cycle or period.

Forecasted Demand

An estimate of the quantity of a product or service that consumers will purchase in the foreseeable future.