The aggregate supply curve is a fixed point representing potential GDP.

Question

Quizplus · Accepted Answer

The aggregate supply curve represents the relationship between the price level and the quantity of real GDP that firms are willing to produce. It is not a fixed point, as it can shift due to changes in factors such as input prices, technology, and government policies. Potential GDP refers to the level of output that the economy can produce when operating at full employment, but it is not the same as the aggregate supply curve.

The Aggregate Supply Curve Is a Fixed Point Representing Potential