Which statement best characterizes the long-run aggregate-supply curve?
A) It is determined by the things that determine output in the classical model.
B) It is located at the point where unemployment is zero.
C) It shifts to the right when the price level increases.
D) It is positioned at the point where the economy would cease to grow.

Question

Quizplus · Accepted Answer

The long-run aggregate-supply curve is determined by the factors that affect the production potential of the economy in the classical model, including technology, labor force, and capital stock.

Which Statement Best Characterizes the Long-Run Aggregate-Supply Curve