Which of the Following Statements Is True

question 149

Multiple Choice

Which of the following statements is true?

• A) The long-run aggregate supply (LRAS)curve shows the Real GDP the economy is prepared to supply at different price levels,assuming wage rates and all other resource prices have fully adjusted to eliminate a recessionary or inflationary gap.
• B) Laissez-faire is a government policy of raising aggregate demand in order to eliminate a recessionary gap.
• C) An economy can operate beyond its physical PPF,but not beyond its institutional PPF.
• D) If the economy is self-regulating,it is always in long-run equilibrium.
• E) a and c

---

Definitions:

Perpetuity

An annuity that pays a set amount indefinitely, without an end.

Ordinary Perpetuity

A type of annuity that pays a fixed amount to an investor at regular intervals indefinitely.

Compounded Annually

An interest calculation method where interest is added to the principal once a year, affecting the calculation of future interest.

Compounded Monthly

An interest calculation method where interest is added to the principal balance monthly, causing the total amount of interest to grow at an increasing rate.