If a Short-Run Equilibrium Occurs at a Level of Output

question 98

Multiple Choice

If a short-run equilibrium occurs at a level of output above the natural rate, then in the transition to the long run prices will ______ and output will ______.

• A) increase; increase
• B) decrease; decrease
• C) increase; decrease
• D) decrease; increase

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Definitions:

Operating Cash Flow

Funds arising from an enterprise's standard operational processes, demonstrating whether the enterprise can generate adequate positive cash flow to support and increase its activities.

Millions

A numerical unit representing one thousand thousand, or 1,000,000, often used to quantify currency, population, or other large-scale counts.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating short-term financial health and liquidity.

Operating Cash Flow

Cash generated from the normal business operations of a company, excluding capital expenditures and investment income or expenses.