In the long run, the level of output is:
A) determined by the quantity of goods and services demanded
B) determined by the quantity and productivity of resources
C) determined by the level of interest rates
D) none of the above

Question

Quizplus · Accepted Answer

The level of output in the long run is determined by the quantity and productivity of resources. This is because in the long run, all resources are considered variable, which means that changes in the quantity and productivity of resources can affect the level of output. The level of output is not solely determined by the quantity of goods and services demanded in the market or the level of interest rates, as these factors can only affect the short-term fluctuations in output levels.

In the Long Run, the Level of Output Is