Which of the Following Statements Is True About the Economy

question 57

Multiple Choice

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

• A) Equilibrium output is below potential GDP and the rate of unemployment exceeds the natural rate.
• B) Production costs are close to zero in the long run.
• 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:

Agricultural Commodity

Basic goods used in commerce that are interchangeable with other goods of the same type, such as grains, beef, or milk, primarily produced through farming activities.

Quantity Demanded

The complete volume of a good or service that consumers are prepared and able to buy at a certain price point.

Quantity Supplied

The quantity of a product or service that sellers are prepared to offer for sale at a set price during a particular timeframe.

Corn-Based Ethanol

An alternative fuel derived from fermenting and distilling starch crops like corn, used primarily to reduce petroleum use, decrease greenhouse gas emissions, and promote agricultural jobs.