In the long run, the aggregate supply curve is
A) positively sloped.
B) negatively sloped.
C) vertical.
D) horizontal.

Question

Quizplus · Accepted Answer

In the long run, the aggregate supply curve is vertical, reflecting the idea that the total output (real GDP) in an economy is determined by the economy's resources (labor, capital, etc.) and technology, not by the price level. This implies that in the long run, an economy's output is at its potential level and does not depend on the level of prices.

In the Long Run, the Aggregate Supply Curve Is