Which of the Following Statements Is True About the Economy

question 40

Multiple Choice

Which of the following statements is true about the economy in the long run?

• A)Equilibrium output must be below potential GDP and the rate of unemployment must exceed the natural rate.
• B)Production costs are close to zero.
• C)The rate of unemployment is zero in the long run.
• D)The aggregate demand curve plays no role in determining the equilibrium level of real GDP.
• E)The aggregate supply curve is a horizontal line.

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Definitions:

Marginal Cost

The boost in total expenditure linked with producing an extra unit of a good or service.

Profit-maximizing

Aimed at achieving the highest possible profits through adjusting production levels, pricing strategies, and cost management.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specified time period.

Price-discriminating Monopolist

A monopolist that charges different prices to different consumers for the same good or service, based on each consumer's willingness or ability to pay.