For the Economy as a Whole, Changes in the Factor-

Multiple Choice

For the economy as a whole, changes in the factor- utilization rate are associated with short- run fluctuations in output because

A) it is cheaper for firms to let their inventories accumulate than to employ more workers.
B) factor prices can only fully adjust in the long run.
C) firms cannot change their prices in the short run.
D) potential output is affected by the factor- utilization rate in the short run.
E) the short- run fluctuations in factor supplies and productivity cancel each other out.