A graph of the long-run aggregate supply curve is:
A) horizontal, and a graph of the short-run aggregate supply is upsloping.
B) upsloping, and a graph of the short-run aggregate supply is vertical.
C) upsloping, and a graph of the short-run aggregate supply is horizontal.
D) vertical, and a graph of the short-run aggregate supply is upsloping.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is vertical because it represents the economy's maximum sustainable output, unaffected by the price level. The short-run aggregate supply curve is upsloping because, in the short run, output can increase with higher prices due to factors like sticky wages and prices.

A Graph of the Long-Run Aggregate Supply Curve Is