Which of the following is true in the long run?
A)The aggregate supply curve is the key determinant of the level of potential output.
B)The long-run aggregate supply curve is horizontal.
C)The actual price level is less than the expected price level.
D)Cyclical unemployment is between 5 percent and 6 percent.
E)The price level is determined entirely by the long-run aggregate supply curve.

Question

Quizplus · Accepted Answer

In the long run, the aggregate supply curve is vertical, indicating that it is the key determinant of the level of potential output, which is not influenced by the price level.

Which of the Following Is True in the Long Run