What is TRUE of the aggregate supply curve in the classical model?
A) The aggregate supply curve is downward sloping.
B) The aggregate supply curve is horizontal.
C) The aggregate supply curve is vertical.
D) The aggregate supply curve is not determined by the level of employment.

Question

Quizplus · Accepted Answer

In the classical model, the aggregate supply curve is vertical, indicating that the level of output is determined solely by the economy's factors of production and technology. The quantity of output supplied does not change as prices change, as prices only affect the distribution of output between producers and consumers.

What Is TRUE of the Aggregate Supply Curve in the Classical