The _____ aggregate supply curve assumed by classical economists means that the equilibrium level of _____ is determined only by the aggregate supply curve.
A)vertical;output
B)horizontal;price
C)upward-sloping;price
D)horizontal;output
E)downward-sloping;price

Question

Quizplus · Accepted Answer

According to classical economics, the aggregate supply curve is vertical because it is determined by factors such as technology, resources, and the labor force, all of which are assumed to be fixed in the short run. Therefore, the equilibrium level of output is determined solely by the aggregate supply curve, and not influenced by changes in aggregate demand.

The _____ Aggregate Supply Curve Assumed by Classical Economists Means