Which of the Following Is True of Aggregate Supply in the Long

question 142

Multiple Choice

Which of the following is true of aggregate supply in the long run?

• A)Nominal wages and output prices are both fixed.
• B)Nominal wages are fixed but output prices can vary.
• C)Output prices are fixed.
• D)Nominal wages are fully responsive to changes in the price level.

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Definitions:

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulation of banks, and providing financial services to depository institutions.

U.S. Government Securities

Financial instruments issued by the United States Department of the Treasury to finance federal government spending, considered very low risk.

Full-Employment Output

is the level of output that an economy can produce when operating at a full employment level, where all available labor and resources are being used efficiently.

Government Securities

Financial instruments issued by the government to finance its expenditures, offering investors a relatively safe investment option compared to other securities.