The long-run aggregate supply curve represents the level of output possible if the economy:
A) is operating at full capacity.
B) is operating at an unemployment rate of zero.
C) has a zero inflation rate.
D) has no structural unemployment.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve represents the level of output the economy can produce when operating at full capacity, using all available resources efficiently. Therefore, choice A is the correct answer. Choices B, C, and D may affect the economy, but they do not directly determine the level of output in the long run.

The Long-Run Aggregate Supply Curve Represents the Level of Output