The long run aggregate supply curve assumes that in the long run, the economy:
A) does not experience supply shocks.
B) has no unemployment.
C) is at full employment.
D) has no inflation.

Question

Quizplus · Accepted Answer

The long run aggregate supply curve assumes that the economy is at full employment, which means that all resources are being utilized and there is no cyclical unemployment. Supply shocks, inflation, and any other short-term fluctuations are assumed to have been adjusted for in the long run.

The Long Run Aggregate Supply Curve Assumes That in the Long