For macroeconomists the distinction between the long run and the short run is important because of the differences in (a) exchange rates (b) GDP (c) policy responses (d) price level

Business Dec 23, 2020

For macroeconomists the distinction between the long run and the short run is important because of the differences in

(a) exchange rates

(b) GDP

(d) price level

Expert Solution

The correct answer is (c) policy responses

This is the correct answer because short run and the long run are two different concepts in economics and they both have the different impacts on the economy. The impact of two that is, fiscal policy and the monetary policy depends on the period. In the short run, the macroeconomic policies lead to impact the real variables while in the long-run they lead to impact the nominal variables.

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