In the long run, the output level is determined by

Question

Quizplus · Accepted Answer

The output level is primarily determined by aggregate supply, which represents the total amount of goods and services that firms are willing and able to produce at a given price level. While aggregate demand can influence the level of output in the short run, in the long run it is the level of aggregate supply that determines the economy's potential output. The government and household income can also have some impact on output, but they are ultimately secondary to aggregate supply.

In the Long Run, the Output Level Is Determined by