7 min read
This study guide covers long-run adjustments in macroeconomics, focusing on how the economy self-corrects to full-employment output. Key concepts include economic shocks, recessionary and inflationary gaps, and the role of price adjustments and wage flexibility in the self-correction process. The guide also explains the effects of shifts in aggregate demand (AD) and short-run aggregate supply (SRAS). Practice questions and exam tips are provided.
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Question 1 of 11
Hey there, econ whiz! 🧠 In the long run, what's the ultimate goal for the economy?
Achieving the lowest possible price level
Reaching the full employment level of output
Maximizing aggregate demand
Eliminating all unemployment