Which of the following statements is TRUE?
A) The long-run aggregate supply curve is upward sloping.
B) The long-run aggregate demand curve is upward sloping.
C) The short-run aggregate supply curve is vertical.
D) The long-run aggregate supply curve is vertical.

Question

Quizplus · Accepted Answer

In the long run, all factors of production are flexible and can be adjusted to meet the changes in the economy. This means that the only factor affecting output is technology, which is fixed in the long run. Therefore, the long-run aggregate supply curve is vertical, indicating that the economy's potential output is fixed regardless of the price level.

Which of the Following Statements Is TRUE