The short-run aggregate supply curve is ________ and the long-run aggregate supply curve is _________.
A) upward sloping; horizontal
B) vertical; upward sloping
C) vertical; horizontal
D) upward sloping; vertical
E) none of the above

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve is upward sloping because, in the short run, firms adjust their production in response to changes in price levels. The long-run aggregate supply curve is vertical, reflecting the idea that in the long run, an economy's production is determined by its resources, technology, and institutions, and is not affected by the price level.

The Short-Run Aggregate Supply Curve Is ________ and the Long-Run