A long-run aggregate supply curve may graphically be represented as a
A) vertical line.
B) horizontal line.
C) an upward sloping line.
D) a downward sloping line.

Question

Quizplus · Accepted Answer

A long-run aggregate supply curve represents the level of output that an economy can produce in the long run, assuming that all inputs are fully utilized and at their natural levels. In the long run, the availability of inputs such as labor, capital, and technology are not fixed, and therefore, the long-run aggregate supply curve is vertical, indicating that output is determined by the economy's capacity to produce goods and services, rather than by the price level. This means that changes in the price level will not affect the level of output in the long run.

A Long-Run Aggregate Supply Curve May Graphically Be Represented as a