Which of the Following Is True in the Long Run

question 72

Multiple Choice

Which of the following is true in the long run?

• A)The aggregate demand curve determines the level of potential output.
• B)The long-run aggregate supply curve is horizontal.
• C)The actual price level and the expected price level are equal.
• D)Cyclical unemployment is between 5 percent and 6 percent.
• E)The price level is determined entirely by the long-run aggregate supply curve.

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Definitions:

Cash Basis

An accounting method where revenue is recorded when cash is received, and expenses are recorded when cash is paid out, without regard to when the transactions actually occur.

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in non-cash accounts to compute net cash provided by operating activities.

Patent Amortization

The gradual expense recognition of a patent's cost over its useful life to reflect the consumption of the patent's value over time.

Net Income

Net income is the total profit of a company after all expenses, including taxes and operational costs, have been subtracted from total revenue.