Which of the following are the defining assumptions of the long run in macroeconomics?
A)Factor prices are exogenous,and technology and factor supplies are changing.
B)Factor prices adjust to output gaps,and technology and factor supplies are constant.
C)Factor prices are exogenous,and technology and factor supplies are constant.
D)Factor prices have fully adjusted to output gaps,and technology and factor supplies are changing.
E)Factor prices are exogenous,and technology and factor prices are exogenous.

Question

Quizplus · Accepted Answer

In the long run, it is assumed that factor prices (such as wages and rent) have fully adjusted to any output gaps, meaning the economy is in a state of equilibrium where supply equals demand. Additionally, the long run allows for changes in technology and factor supplies (like labor and capital), reflecting economic growth and development over time.

Which of the Following Are the Defining Assumptions of the Long