The long-run aggregate supply curve is
A) horizontal at the full-employment price level.
B) vertical at the full-employment level of real GDP.
C) upward sloping because of the effects of price level changes on real GDP.
D) the same as the short-run aggregate supply curve.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is vertical at the full-employment level of real GDP, indicating that in the long run, the total output of an economy is determined by its resources, technology, and institutions, and is not affected by changes in the price level.

The Long-Run Aggregate Supply Curve Is