In the Long Run

question 57

Multiple Choice

In the long run:

• A) real GDP is determined by the aggregate supply.
• B) increases in the supply of money lead to increases in real GDP.
• C) prices are sticky.
• D) real GDP is completely demand- determined.

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Definitions:

Monthly Interest Rate

The interest rate applied to a loan or investment for one month, often derived from an annual interest rate.

Variable Cost

Costs that vary directly with the level of production or activity within a business.

Sales Price

Sales price refers to the final amount of money a buyer pays to purchase a product or service.

Credit Terms

The agreement between a buyer and a seller on the amount of time the buyer has to pay for an item, often including interest rates and penalties for late payment.