The vertical long-run aggregate supply curve satisfies the classical dichotomy because the natural rate of output does not depend on:
A)the labour supply.
B)the supply of capital.
C)the money supply.
D)technology.

Question

Quizplus · Accepted Answer

The classical dichotomy suggests that real variables, like the natural rate of output, are not affected by nominal variables, such as the money supply.

The Vertical Long-Run Aggregate Supply Curve Satisfies the Classical Dichotomy