The ʺLong-Run Aggregate Supply Curve,ʺ Vertical at Y*,shows That

question 3

Multiple Choice

The ʺlong-run aggregate supply curve,ʺ vertical at Y*,shows that

• A)potential output will rise as prices rise.
• B)potential output will fall as prices rise.
• C)potential output is compatible with any price level.
• D)potential output is compatible with one particular price level.
• E)prices will always rise in the long run.

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Definitions:

Width

Width refers to the measurement or extent of something from side to side; in geometry, it is often used to describe the shorter side of a rectangle.

Division

A mathematical operation that is the inverse of multiplication; it involves splitting a quantity into equal parts.

Simplify

Reducing an expression or equation to its simplest form, often by combining like terms and applying arithmetic operations.

Polynomial

An algebraic expression consisting of variables and coefficients, involving operations of addition, subtraction, multiplication, and non-negative integer exponents.