In the Long-Run Aggregate Demand-Aggregate Supply Model

question 60

Multiple Choice

In the long-run aggregate demand-aggregate supply model:

• A)long-run equilibrium occurs wherever the aggregate demand curve intersects the short-run aggregate supply curve.
• B)the long-run aggregate supply curve is horizontal.
• C)the price level is the same regardless of the location of the aggregate demand curve.
• D)long-run equilibrium occurs at the intersection of the aggregate demand curve, the short-run aggregate supply curve, and the long-run aggregate supply curve.

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Definitions:

Original Cost

The initial purchase price or construction cost of an asset or investment, not adjusted for inflation, depreciation, or other factors over time.

Fair Value

An estimate of the price at which an asset or liability could be exchanged in an orderly transaction between market participants at the measurement date.

Fair Value

An estimate of the market value of an asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a seller.

Boot

Additional value or cash given along with a trade or exchange to equalize the value between traded items.