The economy enters the long-run once

Question

Multiple Choice
nominal wages become equal to real wages.
real wages become equal to nominal wages.
sufficient time has elapsed for wage contracts to expire and nominal wages to adjust to output-price changes.
sufficient time has elapsed for real GDP to increase and unemployment to decrease as a consequence

Answer 1

The correct answer is:

sufficient time has elapsed for wage contracts to expire and nominal wages to adjust to output-price changes.

In economics, the long run is the period in which all factors of production and costs are variable, enabling wages and prices to adjust fully to changes in the economy. This typically occurs after labor contracts expire and nominal wages can change in response to shifts in supply and demand.