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If There Was No Profit Effect or Misperception Effect in the Short

question 122

Multiple Choice

If there was no profit effect or misperception effect in the short run, then SRAS is ____ and LRAS is ____.


Definitions:

Production Possibilities Curve

A graphical representation showing the maximum combination of goods and services that can be produced from a fixed set of resources.

Bowed Outward

A description of a production possibility frontier that demonstrates the increasing opportunity cost of producing one good over another.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to invest in one option over others.

Rectangles

A four-sided flat shape where every angle is a right angle and opposite sides are parallel and equal in length.

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