Which of the Following Are the Defining Assumptions of the Long

question 131

Multiple Choice

Which of the following are the defining assumptions of the long run in macroeconomics?

• A)Factor prices are exogenous,and technology and factor supplies are changing.
• B)Factor prices adjust to output gaps,and technology and factor supplies are constant.
• C)Factor prices are exogenous,and technology and factor supplies are constant.
• D)Factor prices have fully adjusted to output gaps,and technology and factor supplies are changing.
• E)Factor prices are exogenous,technology and factor prices are exogenous.

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Definitions:

Cost of Capital

A company's expense of funding its operations either through debt, equity, or a combination, representing the return rate investors expect.

Tax Rate

The level at which a person or business's income is subjected to taxation.

Bonds at Par Value

Bonds that are sold or traded at their original issuing price or face value.

Equity Financed

Refers to the method of raising capital for a business by selling ownership shares in the company, as opposed to incurring debt.