If potential output is unknown:
A)we can still determine how the short-run aggregate supply curve will shift.
B)factor prices are more likely to change.
C)factor prices are less likely to change.
D)we cannot determine precisely how the short-run aggregate supply curve will shift.

Question

Quizplus · Accepted Answer

When potential output is unknown, it becomes challenging to predict how the short-run aggregate supply curve will shift because the curve's position is influenced by expectations about potential output and actual output levels.

If Potential Output Is Unknown