In the AD/AS Framework, When the Economy Is in Long-Run

question 21

Multiple Choice

In the AD/AS framework, when the economy is in long-run equilibrium,

• A) inflation is occurring.
• B) the entire labor force is employed.
• C) actual prices are equal to expected prices.
• D) actual levels of income and employment are less than the natural levels of income and Employment.

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Definitions:

Transfer

The act of moving assets, rights, or obligations from one party to another through sale, gift, or other means.

Possession

The control or ownership of something, whether personal property or real estate.

Demand Instrument

A financial document requiring payment to the holder on demand.

Uniform Commercial Code

A standardized set of laws that regulate financial contracts and transactions in the United States to facilitate commerce.