When business cycles are analyzed, what part of the aggregate demand and aggregate supply model is assumed to be unchanging?
A) price level
B) aggregate demand curve
C) short-run aggregate supply curve
D) long-run aggregate supply curve

Question

Quizplus · Accepted Answer

When analyzing business cycles, the long-run aggregate supply curve is assumed to be unchanging because it represents the economy's potential output, unaffected by short-term fluctuations in demand or temporary supply shocks.

When Business Cycles Are Analyzed, What Part of the Aggregate