If an Economy Is in Long-Run Equilibrium at Its Potential

question 38

Multiple Choice

If an economy is in long-run equilibrium at its potential output level, this also means:

• A)the money market is in equilibrium.
• B)money demand is greater than money supply.
• C)money supply is greater than money demand.
• D)there is excess money in the money market.

---

Definitions:

Oral Fixation

A concept in psychoanalytic theory that suggests an obsession with oral activities (eating, talking, smoking) stemming from issues in early development.

Reality Principle

The concept in psychoanalytic theory that the mind functions to mediate between the demands of the id and the realities of the external world.

Individualism

An outlook within society that upholds the importance of individual autonomy against the backdrop of communal or state intervention.

Collectivism

A social and cultural orientation that emphasizes the priority of group needs over individual desires or goals.