Which of the following is a defining characteristic of the AD/AS macro model in the long run?
A)the level of potential output is constant
B)technology used in production is constant
C)factor supplies are assumed to be fixed
D)factor prices are assumed to be fixed
E)changes in real GDP are determined by the changes in potential output

Question

Quizplus · Accepted Answer

In the long run, the AD/AS model assumes that the economy operates at its potential output, and changes in real GDP are determined by changes in potential output, which can be influenced by factors like technology and factor supplies.

Which of the Following Is a Defining Characteristic of the AD/AS