The long-run aggregate supply curve is the relationship between the quantity of real GDP supplied and ________ when ________.
A) the price level; real GDP equals potential GDP
B) real GDP demanded; the wage rate is constant
C) the price level; real GDP equals nominal GDP
D) real GDP demanded; the price level does not change

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve shows the relationship between the quantity of real GDP supplied and the price level when real GDP equals potential GDP, indicating the economy's maximum sustainable output level without causing inflation.

The Long-Run Aggregate Supply Curve Is the Relationship Between the Quantity