Figure 33-5.
-Refer to Figure 33-5. The appearance of the long-run aggregate-supply LRAS) curve
A) is consistent with the concept of monetary neutrality.
B) is consistent with the idea that point A represents a long-run equilibrium and a short-run equilibrium when the relevant short-run aggregate-supply curve is SRAS1.
C) indicates that Y1 is the natural rate of output.
D) All of the above are correct.

Question

Figure 33-5. 
-Refer to Figure 33-5. The appearance of the long-run aggregate-supply LRAS) curve
A) is consistent with the concept of monetary neutrality. 
B) is consistent with the idea that point A represents a long-run equilibrium and a short-run equilibrium when the relevant short-run aggregate-supply curve is SRAS1. 
C) indicates that Y1 is the natural rate of output. 
D) All of the above are correct.

Quizplus · Accepted Answer

The LRAS curve's appearance suggests that prices do not have an impact on long-term output or employment in the economy, which is consistent with the principle of monetary neutrality. Point A on the graph depicts both long- and short-term equilibria, which can only occur if Y1 is the economy's natural rate of output. As a result, all of the statements are accurate.

Figure 33-5. -Refer to Figure 33-5. the Appearance of the Long-Run Aggregate-Supply