In the Long Run

question 147

Multiple Choice

In the long run

• A) the aggregate supply curve is upward sloping.
• B) real GDP is equal to potential GDP.
• C) aggregate supply depends on the price level.
• D) All of the above answers are correct.

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Definitions:

Marginal Product

The additional output a firm produces as a result of hiring one more unit of a factor of production, such as labor or capital.

Bushel of Wheat

A measure of volume used in the U.S. to quantify agricultural commodities, equivalent to approximately 35.24 liters.

VMPL Curve

A graphical representation showing the value of the marginal product of labor, which changes as more labor is employed.

Technological Advance

The development and application of new technologies or improvements in existing technologies, leading to greater efficiency or new capabilities.