Because the open-economy macroeconomic model focuses on the long run, it is assumed that
A)GDP, but not the price level is given.
B)the price level, but not GDP is given.
C)both the price level and GDP are given.
D)the price level and GDP are variables to be determined by the model.

Question

Quizplus · Accepted Answer

In the long run, both the price level and GDP are considered given or fixed in the open-economy macroeconomic model, as the model assumes full employment and potential output.

Because the Open-Economy Macroeconomic Model Focuses on the Long Run