In the Short Run

question 16

Multiple Choice

In the short run

• A) the level of GDP is determined by the demand and supply for labor, the supply of capital, and technological progress.
• B) increases in the money supply increase GDP.
• C) prices are flexible.
• D) the economy always operates at full employment.

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Definitions:

Marginal Utility

The additional satisfaction or benefit that a consumer derives from consuming an additional unit of a good or service.

Equilibrium

A state where supply and demand balance, and as a result, prices become stable.

Unit Price

The cost assigned to a single unit of a product or service, facilitating price comparisons among similar products based on per unit costs.

Marginal Utility

The additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.