When an Economy Is in Long Run Equilibrium

question 171

Multiple Choice

When an economy is in long run equilibrium,

• A) it will be impossible to sustain the current rate of output in the future.
• B) the interest rate will decline.
• C) the foreign exchange value of the dollar will tend to appreciate.
• D) the actual and natural rates of unemployment will be equal.

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Definitions:

Reactants

Ingredients that are present from the start in a chemical reaction, getting used up as they generate the outcome products.

Equilibrium

The state in which both reactants and products are present in concentrations which have no further tendency to change with time, usually in a closed system.

Product

The result of multiplying two or more numbers together or the substances formed at the end of a chemical reaction.

Concentration

The measure of the amount of a sub-component (especially solute) in a solution, denoting how much of a substance is contained in a certain amount of another substance.