In the long run, the position of the short-run aggregate supply curve determines:
A)output.
B)the price level.
C)both output and the price level.
D)neither output nor the price level.

Question

Quizplus · Accepted Answer

In the long run, the position of the short-run aggregate supply curve does not determine output or the price level. Instead, these are determined by the long-run aggregate supply curve, which reflects the economy's potential output, and by aggregate demand.

In the Long Run, the Position of the Short-Run Aggregate