When the Economy Is in Short Run Equilibrium,all of the Following

question 123

Multiple Choice

When the economy is in short run equilibrium,all of the following are true EXCEPT that

• A) Y may exceed Y*.
• B) Y may fall short of Y*.
• C) inflation inertia may exist.
• D) cyclical unemployment may exist.
• E) Y must equal Y*.

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Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out to shareholders as dividends. These funds are often reinvested in the business.

Net Capital Spending

The total spending on fixed assets minus the proceeds from the sale of fixed assets over a period.

Canadian GAAP

Generally Accepted Accounting Principles in Canada, a set of accounting standards for financial reporting by Canadian companies.