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AP Macroeconomics Mod 2 E Define Using Graphs As Appropriate the Short Run and the Long Run Questions

Distinguish the short run, when some input prices are fixed, from the long run, when flexible wages and prices support full-employment adjustment.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • explain why flexible long-run wages and prices allow self-correction toward full employment

AP Macroeconomics Mod 2 E Define Using Graphs As Appropriate the Short Run and the Long Run Questions question 1

[Maximum number: 1]

Classical economists believe that the economy moves toward full employment because

A

government spending supplements private investment to keep aggregate demand in balance with aggregate supply

B

households spend all of their disposable income to purchase the full-employment output

C

wages and prices are flexible

D

private investment is constant and independent of national income

E

the money supply grows at a constant rate to generate sufficient demand to purchase the full-employment output

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