Which of the Following Is a Defining Assumption of the AD/AS

question 16

Multiple Choice

Which of the following is a defining assumption of the AD/AS macro model in the long run?

• A)factor supplies are assumed to be fixed
• B)technology used in production is constant
• C)the level of potential output is constant
• D)factor prices are assumed to be fixed
• E)changes in real GDP are determined by the changes in potential output

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Definitions:

Tariffs

Taxes imposed on imported or, less commonly, exported goods, used by governments to regulate trade, protect domestic industries, or generate revenue.

Importing Products

The business activity of bringing goods or services into one country from another to sell them.

Domestic Markets

The supply and demand of goods and services within a single country.

Technical Service

Professional services that provide specialized technical expertise or support to businesses or consumers.