In the very long-run AD-AS model,
A)only fiscal policy can affect both output and prices
B)only monetary policy can affect both output and prices
C)monetary policy can affect output but not prices
D)active stabilization policy is ineffective in changing output
E)the unemployment rate is always assumed to be zero

Question

Quizplus · Accepted Answer

In the very long-run, the economy is at full employment, and output is determined by factors like technology and resources, making active stabilization policy ineffective in changing output.

In the Very Long-Run AD-AS Model