The long-run aggregate supply curve is ________ because along it, as prices rise, the money wage rate ________.
A)vertical; falls
B)upward- sloping; falls
C)vertical; rises
D)upward- sloping; stays constant

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is vertical because it represents the economy's maximum sustainable output, which is not affected by changes in the price level. As prices rise, the money wage rate also rises to maintain real wages, keeping output constant.

The Long-Run Aggregate Supply Curve Is ________ Because Along It