In the basic AD/AS model,which of the following is a defining assumption of the adjustment process that takes the economy from the short run to the long run?
A)Factor supplies are assumed to be varying.
B)Technology used in production is endogenous.
C)The level of potential output is changing.
D)Factor prices respond to output gaps.
E)Firms cannot operate near their normal capacity.

Question

Quizplus · Accepted Answer

The Answer is D

In the Basic AD/AS Model,which of the Following Is a Defining