Which of the following statements is correct for the long run?
A)Output is determined by the amount of capital,labor,and technology;the interest rate adjusts to balance the supply and demand for money;the price level adjusts to balance the supply and demand for loanable funds.
B)Output is determined by the amount of capital,labor,and technology;the interest rate adjusts to balance the supply and demand for loanable funds;the price level adjusts to balance the supply and demand for money.
C)Output is determined by the amount of capital,labor,and technology;the interest rate adjusts to balance the supply and demand for loanable funds;the price level is relatively slow to adjust.
D)Output responds to the aggregate demand for goods and services;the interest rate adjusts to balance the supply and demand for loanable funds;the price level adjusts to balance the supply and demand for money.

Question

Quizplus · Accepted Answer

In the long run, output is determined by the amount of capital, labor, and technology, as factors of production, which influence the economy's potential output. The interest rate adjusts to balance the supply and demand for loanable funds, which affects the allocation of savings and investments in the economy. The price level adjusts to balance the supply and demand for money, which determines the value of the currency and the affordability of goods and services. Therefore, choice B is the correct statement for the long run.

Which of the Following Statements Is Correct for the Long