The Long-Run Response to a Drop in the Wage Exceeds

question 53

Multiple Choice

The long-run response to a drop in the wage exceeds the short-run response for all of the following reasons except:

• A)it is more difficult to substitute capital for labor in the long run than the short run
• B)an increase in labor makes capital more productive,leading to more capital and therefore higher labor productivity
• C)the demand for the firm's output is more elastic in the long run
• D)technology may change in the long run

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Definitions:

Political System

The system of government by which a country or community is administered and regulated, encompassing institutions, political organizations, and norms.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured by the rise in Gross Domestic Product (GDP).

Sovereignty

The supreme power or authority of a state to govern itself or another state, often relating to its independence and control over its territory.

Articles of Confederation

The first constitution of the United States, adopted during the Revolutionary War, which established a loose alliance of states with limited central government powers.