What is measured on the horizontal axis when we draw a graph of the long-run aggregate supply curve?
A) production of capital goods
B) production of consumer goods
C) the price level
D) real GDP

Question

Quizplus · Accepted Answer

The horizontal axis of the long-run aggregate supply curve represents the level of real gross domestic product (GDP), which measures the amount of goods and services produced in the economy adjusted for inflation. Therefore, the correct choice is D) real GDP. The production of capital goods and consumer goods are not directly measured on the horizontal axis of the long-run aggregate supply curve, and while the price level is an important variable in the model, it is usually shown on the vertical axis.

What Is Measured on the Horizontal Axis When We Draw