Which of the Following Will Always Be True When an Economy

question 127

Multiple Choice

Which of the following will always be true when an economy is in long-run equilibrium?

• A) The level of prices will be constant (that is, inflation will be zero).
• B) Actual output will exceed the potential output.
• C) The actual rate of unemployment will be less than the natural rate of unemployment.
• D) The output of the economy will correspond with the full-employment output.

---

Definitions:

Financial Accounting

The field of accounting focused on the preparation of financial statements for external users, such as investors, creditors, and regulatory agencies.

Economic Events

Economic events are transactions or occurrences that affect the financial position of an entity and can be reliably measured.

Period Cost

Expenses that are not directly tied to the production process and are instead accounted for in the period they occur.

Product Cost

The total of costs directly assigned to the production of goods sold by a company, including materials, labor, and overhead.