Which of the following assumptions is NOT an assumption of the “long run” in macroeconomics?A. The economy is at full employment.B. Prices are flexible and not sticky.C. Expectations are rational and no information asymmetries exist.D. None of the above.
D. None of the above.
D. None of the above.
All three assumptions, including that the economy is at full employment, prices are flexible and not sticky, and expectations are rational with no information asymmetries, are considered assumptions of the “long run” in macroeconomics. The long run refers to a period of time where all prices can adjust and all inputs can be varied. These assumptions are used to analyze how the economy will perform over the long run.
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