Final answer:
The short run is an imprecise period during which fixed inputs to production cannot be adjusted by firms. It generally refers to a time frame of less than five years, whereas the long run is when all factors of production can be varied and is typically beyond five years.
Step-by-step explanation:
The short run is a concept that refers to a period in which certain economic variables remain fixed, specifically fixed inputs. It is an imprecise amount of time because it varies according to the specific nature of the business and the economic environment. In the short run, firms are not able to change their usage of fixed inputs, like the size of the factory or the amount of machinery they have. This is different from the long run, where firms can adjust all factors of production, including fixed assets.
Based on empirical evidence, the short-term effects of macroeconomic adjustments, including shifts in aggregate demand, can last from two to five years. After this initial period, longer-term adjustments in wages and prices help the economy return to potential GDP, which characterizes the long run as time periods longer than five years.