The long-run aggregate supply curve shows the output level that an economy can produce when:
A)firms adjust quantity rather than price.
B)capital is fully employed.
C)labor is fully employed.
D)both capital and labor are fully employed.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve represents the total output level an economy can produce when both capital and labor are fully employed, assuming all other factors remain constant. This reflects the economy's maximum sustainable output level.

The Long-Run Aggregate Supply Curve Shows the Output Level That