In a Long-Run Equilibrium of Aggregate Demand and Aggregate Supply

question 36

Multiple Choice

In a long-run equilibrium of aggregate demand and aggregate supply,

• A)output prices are consistent and sustainable relative to input prices.
• B)actual values are equal to expected values.
• C)wages and salaries are high enough relative to the cost of living to make work worthwhile.
• D)All of the above are correct.

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Definitions:

Capital Investment

Funds spent by a firm to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Net Cash Flows

The difference between a company's cash inflows and cash outflows within a specific period.

Net Present Value

A method of evaluating investment opportunities that calculates the difference between the present value of cash inflows and outflows over a period of time.

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.