In the long run, if the prices of goods and services paid by consumers increase the long-run aggregate:
A) supply will increase.
B) supply will decrease.
C) supply will stay the same.
D) demand will increase.

Question

Quizplus · Accepted Answer

In the long run, the aggregate supply is determined by factors such as technology, resources, and institutions, not by the price level. Therefore, an increase in the price level does not affect the long-run aggregate supply.

In the Long Run, If the Prices of Goods and Services