-Identify the 3 curves in the above figure.
A) (1) is long-run aggregate supply, (2) is short-run aggregate supply, (3) is aggregate demand.
B) (1) is aggregate demand, (2) is short-run aggregate supply, (3) is long-run aggregate supply.
C) (1) is short-run aggregate supply, (2) is long-run aggregate supply, (3) is aggregate demand.
D) (1) is long-run aggregate supply, (2) is aggregate demand, (3) is short-run aggregate supply.

Question

-Identify the 3 curves in the above figure.
A) (1) is long-run aggregate supply, (2) is short-run aggregate supply, (3) is aggregate demand. 
B) (1) is aggregate demand, (2) is short-run aggregate supply, (3) is long-run aggregate supply. 
C) (1) is short-run aggregate supply, (2) is long-run aggregate supply, (3) is aggregate demand. 
D) (1) is long-run aggregate supply, (2) is aggregate demand, (3) is short-run aggregate supply.

Quizplus · Accepted Answer

In macroeconomics, the long-run aggregate supply curve (LRAS) is typically vertical, reflecting the economy's potential output independent of price level. The short-run aggregate supply curve (SRAS) slopes upwards, indicating that higher prices can incentivize more production in the short term. The aggregate demand (AD) curve slopes downwards, showing that lower price levels increase the quantity of goods and services demanded.

-Identify the 3 Curves in the Above Figure