The "Long- Run Aggregate Supply Curve", Vertical at Y^*

question 38

Multiple Choice

The "long- run aggregate supply curve", vertical at Y^* , shows that

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

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Definitions:

Redeems

The act of exchanging something, such as a coupon or voucher, for goods, services, or a monetary refund.

Unamortized Premium

The portion of the bond premium that has not yet been amortized or gradually written off over the lifetime of the bond.

Liabilities Section

Part of a balance sheet that reports obligations the company owes to outside parties, including debts, loans, and other financial obligations.

Effective Interest Method

A technique used in accounting to allocate the interest expense or income over the life of a financial instrument such as a bond or a loan.