As the Macro Economy Adjusts from the Short Run to the Long

Multiple Choice

As the macro economy adjusts from the short run to the long run,

A) wages and other factor prices adjust 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 cause deviations from potential output.
E) aggregate supply shocks cause deviations from potential output.