Long-run aggregate supply is
A) the sum of planned expenditures by consumers and firms.
B) the level of output that occurs when the economy is operating on the production possibilities curve.
C) downward sloping.
D) upward sloping.

Question

Quizplus · Accepted Answer

Long-run aggregate supply represents the total output an economy can produce when it is fully employing all available resources, and it is typically illustrated as a vertical line at the level of potential output. This corresponds to the economy operating at its production possibilities frontier, where it is not possible to produce more of one good without producing less of another, indicating full and efficient use of resources.

Long-Run Aggregate Supply Is