-The Economy Pictured in the Diagram Above Is in Short-Run

question 59

Multiple Choice

-The economy pictured in the diagram above is in short-run equilibrium with the combination of inflation and output indicated by point ________.The long-run equilibrium combination of inflation and output for this economy is indicated by point ________.

• A) A;B
• B) A;C
• C) B;A
• D) B;C
• E) C;A

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Definitions:

Fixed Costs

Costs that do not change with the level of output produced by the firm, such as rent, salaries, or loan repayments.

Positive Reinforcement

A method in behavior psychology where a positive stimulus is presented after a desired behavior, increasing the likelihood of that behavior in the future.

Desirable Behaviour

Actions or conduct that are considered favorable or appropriate in a particular context.

Frequency

A measure of how often an event occurs.