In the SP/LP Model It Is Possible to Have All

question 177

Multiple Choice

In the SP/LP model it is possible to have all short-run equilibrium points run along the LP line if we employ the assumption of ________ expectations.

• A)backward-looking
• B)forward-looking
• C)adaptive
• D)extrapolative

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Definitions:

Normal Balance

The side (debit or credit) on which increases to an account are recorded, depending on the type of account.

Liability Account

An accounting record that represents a company's legal debts or obligations that arise during the course of business operations.

Revenue Account

An account that tracks the income generated from a company's primary operations.

Asset Account

An account on a balance sheet representing the resources owned by a company, with future economic benefit.