The position of the long-run aggregate supply curve is determined by
I. the aggregate production function
II. the labor demand curve
III. the labor supply curve
IV. the prevailing average price level

Question

The position of the long-run aggregate supply curve is determined by 
I. the aggregate production function
II. the labor demand curve
III. the labor supply curve
IV. the prevailing average price level

Quizplus · Accepted Answer

The long-run aggregate supply curve is determined by the economy's productive capacity, which is influenced by the aggregate production function, labor demand, and labor supply. The average price level does not affect the long-run aggregate supply.

The Position of the Long-Run Aggregate Supply Curve Is Determined