According to neoclassical economists,which of the following statements is correct?
A)The AD curve is horizontal but the AS is vertical.
B)The AD curve is vertical but the AS is horizontal.
C)The AS is vertical.
D)The AS is horizontal.

Question

Quizplus · Accepted Answer

Neoclassical economists argue that in the long run, the Aggregate Supply (AS) curve is vertical, reflecting the idea that the economy's output is determined by factors such as technology and resources, rather than the price level. This contrasts with short-term models where the AS might be upward sloping or horizontal, reflecting price and wage stickiness.

According to Neoclassical Economists,which of the Following Statements Is Correct