Because the aggregate price level has no effect on aggregate output in the long run, the long-run aggregate supply curve is:
A) upward sloping.
B) vertical.
C) horizontal.
D) downward sloping.

Question

Quizplus · Accepted Answer

In the long run, aggregate output is determined by the economy's capacity for production, which is not affected by changes in the aggregate price level. Thus, the long-run aggregate supply curve is vertical, indicating that output is fixed at the economy's potential level.

Because the Aggregate Price Level Has No Effect on Aggregate