The Long-Run Aggregate Supply Curve

question 24

Multiple Choice

The long-run aggregate supply curve

• A) relates the level of nominal output produced by firms to the implicit price deflator.
• B) relates the level of output produced by firms to the price level in the long run.
• C) is vertical because there is one price level and an infinite number of outputs.
• D) is determined by the real output demanded by economic agents in an economy.

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Definitions:

Price

The fund amount deemed necessary, expected, or allocated for a service or good.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price point, at a given time.

Price Falls

A situation where the cost of goods or services decreases, often reflecting changes in supply and demand.

Price Ceiling

A government-imposed limit on how high a price can be charged on a product or service.