The SAS curve and the LAS curve
A) intersect at potential GDP.
B) are parallel at potential GDP.
C) are perpendicular to one another at potential GDP.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The SAS (Short-Run Aggregate Supply) curve and the LAS (Long-Run Aggregate Supply) curve intersect at potential GDP, indicating the economy's capacity to produce goods and services in the long run without increasing inflation.

The SAS Curve and the LAS Curve