The long-run aggregate supply (LRAS)curve is
A) horizontal.
B) vertical.
C) positively sloped.
D) negatively sloped.

Question

Quizplus · Accepted Answer

LRAS curve is vertical because it represents the potential output of the economy in the long run, which is determined by the available resources, technology, and institutions. It is independent of the price level, so the LRAS curve is vertical, indicating that changes in price levels do not affect potential output in the long run.

The Long-Run Aggregate Supply (LRAS)curve Is