A vertical aggregate supply curve
A)Implies that supply-side policies will have no effect on the macro equilibrium.
B)Implies that aggregate demand shifts have no impact on output.
C)Is likely in the short run.
D)Reflects the inflexibility of prices and wages.

Question

Quizplus · Accepted Answer

A vertical aggregate supply curve implies that changes in aggregate demand will not affect the level of output, as the economy is at full capacity.

A Vertical Aggregate Supply Curve