In the long run, the aggregate supply curve is:
A) downward sloping.
B) horizontal at the full employment level of GDP.
C) upward sloping.
D) vertical at the full employment level of GDP.

Question

Quizplus · Accepted Answer

In the long run, the aggregate supply curve is vertical at the full employment level of GDP because it represents the economy's maximum sustainable output, unaffected by the price level.

In the Long Run, the Aggregate Supply Curve Is