Which of the following variables changes along the long-run aggregate supply curve?
A)Real GDP
B)Investment
C)Consumption
D)Government purchases
E)Price level

Question

Quizplus · Accepted Answer

The price level is the only variable that changes along the long-run aggregate supply curve. The long-run aggregate supply curve is a vertical line at the potential level of real GDP, which is determined by the economy's factors of production and technology. In the long run, changes in variables such as investment, consumption, government purchases, etc., only result in changes in the price level, not the level of real GDP.

Which of the Following Variables Changes Along the Long-Run Aggregate