The Economy Enters the Long-Run Once

question 41

Multiple Choice

The economy enters the long-run once

• A) nominal wages become equal to real wages.
• B) real wages become equal to nominal wages.
• C) sufficient time has elapsed for wage contracts to expire and nominal wages to adjust to output-price changes.
• D) sufficient time has elapsed for real GDP to increase and unemployment to decrease as a consequence

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Definitions:

Federal Income Tax

A tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Legally Operate

To conduct business activities in accordance with the laws and regulations of the jurisdiction in which the business exists.

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash transactions occur.

Accounting

is the systematic recording, reporting, and analysis of financial transactions of a business or individual.