Variable Costs Are Fixed on a Per-Unit Basis and Variable

question 72

True/False

Variable costs are fixed on a per-unit basis and variable in total.

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Definitions:

Long-Run Aggregate Supply

Represents the total output an economy can produce when both capital and labor are fully employed, assuming constant technology and resources.

Real GDP

The total value of goods and services produced in a country, adjusted for inflation or deflation, providing a more accurate measure of economic output.

Potential Output

The highest level of real GDP that an economy can achieve when it is operating at full capacity, without causing inflation.

Recessionary Gap

A situation where an economy's real GDP is lower than its potential GDP, leading to underutilized resources and higher unemployment.