Which of the Following Is True in the Short Run

question 138

Multiple Choice

Which of the following is true in the short run but not in the long run?

• A)Actual output is equal to potential output.
• B)Actual output can exceed potential output.
• C)Structural unemployment can exist.
• D)Frictional unemployment can exist.
• E)Real and nominal GDP can differ.

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Definitions:

Investment

The allocation of resources, usually financial, into assets with the expectation of generating income or profit in the future.

Economic Rent

A return on an asset or payment to a factor of production in excess of what's necessary to keep it in its current use.

LAC

Long-run Average Cost, which represents the per unit cost of production when all inputs, including capital, are variable.

Oil Reserves

Quantities of crude oil held underground that have been discovered and are considered recoverable under current economic and operational conditions.