The study of the long run in macroeconomics focuses
A)primarily on changes to the output gap, with a constant level of potential output.
B)primarily on the supply of factors of production.
C)equally on potential GDP and actual GDP.
D)primarily on changes to potential GDP.
E)on changes to actual GDP but not on changes in potential GDP.

Question

Quizplus · Accepted Answer

The study of the long run in macroeconomics primarily focuses on changes to potential GDP, which is the maximum level of output that an economy can produce given its resources and technology. This is different from the short run, which focuses on actual GDP and the output gap, or the difference between actual GDP and potential GDP.

The Study of the Long Run in Macroeconomics Focuses