Most economists believe that the aggregate supply curve is
A)upward-sloping in the short run, but vertical in the long run.
B)upward-sloping in the long run, but vertical in the short run.
C)upward-sloping in both the short run and in the long run.
D)vertical in both the short run and in the long run.

Question

Quizplus · Accepted Answer

The aggregate supply curve is generally considered to be upward-sloping in the short run because prices and wages do not adjust immediately to changes in demand. However, in the long run, it is viewed as vertical because, at this point, prices and wages have adjusted, and the economy is at its full employment level, meaning output is determined by factors like technology and resources, not the price level.

Most Economists Believe That the Aggregate Supply Curve Is