The Macroeconomy Is Said to Be in Long-Run Equilibrium Only

question 141

Multiple Choice

The macroeconomy is said to be in long-run equilibrium only if

• A) the resource, loanable funds, foreign exchange, and goods and services markets are all in equilibrium.
• B) prices were incorrectly estimated by decision makers.
• C) the output of the economy exceeds the full-employment level of output.
• D) the economy is operating along its short-run aggregate supply curve.

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Definitions:

Land Improvements

Enhancements made to a parcel of land to increase its value or usability, such as landscaping, paving, or installation of utilities, which are typically considered depreciable assets.

Personal Property

Assets that are movable and not permanently attached to one location, including tangible items like furniture and intangible entities like intellectual property.

Units-of-Activity Method

A depreciation method where the expense is based on the number of hours used or units produced by an asset, rather than the passage of time.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.