If the Long-Run Aggregate Supply Curve Is Vertical, Factors That

question 89

True/False

If the long-run aggregate supply curve is vertical, factors that shift the aggregate demand curve to the left will increase the price level.

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Definitions:

Explicit Costs

Direct, out-of-pocket payments for wages, materials, rent, and other expenditures incurred in the conduct of a business.

Equilibrium Interest Rate

The interest rate at which the quantity of money demanded equals the quantity of money supplied.

Loanable Funds

The total amounts of capital available for borrowing, which includes savings and any additional credits created by financial institutions.

Market

A conceptual or physical place where buyers and sellers convene to exchange goods, services, and information.