Which of the Following Is Occurring as the Macro Economy

Multiple Choice

Which of the following is occurring as the macro economy is adjusting from the short run to the long run?

A) Wages and other factor prices are adjusting to close output gaps.
B) Potential output is adjusting to close inflationary or recessionary gaps.
C) Wages and other factor prices remain constant.
D) Aggregate demand shocks are causing deviations from potential output.
E) Aggregate supply shocks are causing deviations from potential output.