The Long-Run Aggregate Supply Curve Is

question 49

Multiple Choice

The long-run aggregate supply curve is

• A) vertical because full-employment output is independent of the price level.
• B) upward sloping because the economy grows over time.
• C) horizontal because full-employment output is independent of the price level.
• D) upward sloping because as the price level rises,firms will increase output.
• E) downward sloping because rising prices reduce real wealth and spending.

---

Definitions:

Great Depression

A severe worldwide economic downturn that took place mostly during the 1930s, leading to high unemployment, low output, and deflation.

Curve

In economics, a curve often represents graphical data showing relationships between two variables, such as supply and demand or price and quantity.

Production

The process of creating goods and services, from the input of resources to the output of finished products.

Price Level

The average of the current prices of goods and services in the economy, often compared over time to assess inflation.