In Terms of Aggregate Supply, the Difference Between the Long

question 82

Multiple Choice

In terms of aggregate supply, the difference between the long run and the short run is that in the long run:

• A)the price level is variable.
• B)employment is variable.
• C)real output is variable.
• D)nominal wages and other input prices are variable.

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Definitions:

Variable Costs

Expenses that vary in relation to the amount of activity or the quantity of output produced.

Fixed Costs

Expenses that remain constant regardless of production or sales volume, including rent, salaries, and insurance costs.

Operating Income

An indication of a company's profitability from its core business operations, excluding income and expenses from unusual, non-operational activities.

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, contributing to covering fixed costs and generating profit.