The Distinction Between the Short-Run and Long-Run Aggregate Supply Curve

question 43

Multiple Choice

The distinction between the short-run and long-run aggregate supply curve is necessary because in the long run:

• A)technology is fixed, but in the short run it changes.
• B)changes in the price level do not affect the level of real GDP but do in the short run.
• C)the aggregate supply curve is horizontal, but in the short run it is upward sloping.
• D)the price level is constant, but in the short run it fluctuates.

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Definitions:

Retrenchment

A strategy or action taken by businesses to reduce costs or spending in response to economic challenges, often involving cuts in workforce, operations, or investment.

Strong Cash Flow

A financial situation where a company has a steady and robust inflow of cash, indicating good liquidity and operational health.

High Performers

Employees or individuals who consistently exceed the standard expectations and objectives of their roles.

Stability

In a business context, refers to the consistency, reliability, and predictability of a company's financial status, growth, and operational processes over time.