For movements along the long-run aggregate supply curve,
A) the prices of goods and services change while the prices of productive resources hold steady.
B) the price level and the money wage rate change by the same percentage.
C) potential GDP is dependent on the price level.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

In the long-run aggregate supply curve, the price level and the money wage rate change by the same percentage, meaning that real wages remain constant, and potential GDP is not affected by the price level.

For Movements Along the Long-Run Aggregate Supply Curve