A vertical long- run aggregate supply curve indicates that
A)an increase in the price level will increase technological change and economic growth.
B)the long- run aggregate supply curve never shifts.
C)an increase in the price level will permit the economy to achieve a higher level of output.
D)output rates greater than the long- run output rate are unattainable.
E)an increase in the price level will not expand an economy's output in the long run.

Question

Quizplus · Accepted Answer

A vertical long-run aggregate supply curve indicates that the economy has reached its potential output, which cannot be expanded in the long run by increasing the price level. Therefore, an increase in the price level will not expand an economy's output in the long run.

A Vertical Long- Run Aggregate Supply Curve Indicates That