We distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve. In the long run
A) technology is fixed but it is not in the short run.
B) the price level is constant but in the short run it fluctuates.
C) the aggregate supply curve is horizontal while in the short run it is upward sloping.
D) real GDP equals potential GDP.

Question

Quizplus · Accepted Answer

In the long run, real GDP equals potential GDP, reflecting the economy's full employment output when all factors of production are used efficiently. This contrasts with the short-run aggregate supply curve, where real GDP can deviate from potential GDP due to price level fluctuations and other short-term factors.

We Distinguish Between the Long-Run Aggregate Supply Curve and the Short-Run