As general price variability declines, the Lucas supply curve
A) must get steeper.
B) must get flatter.
C) must shift out from the vertical axis.
D) must shift in toward the vertical axis.
E) is left unaffected.

Question

Quizplus · Accepted Answer

As general price variability declines, the Lucas supply curve must get flatter because the supply curve is less responsive to changes in the price level.

As General Price Variability Declines, the Lucas Supply Curve