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

Question 124

Multiple Choice

Which of the following is a defining assumption of the AD/AS macro model in the short run?


A) factor supplies are assumed to be flexible
B) technology used in production is endogenous and variable
C) the level of potential output fluctuates with the price level
D) factor prices are assumed to be exogenous
E) firms cannot operate near their normal capacity

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