The Long-Run Aggregate Supply Curve Shows That Long-Run Economic Growth

question 162

Multiple Choice

The long-run aggregate supply curve shows that long-run economic growth:

• A) depends on the rate of inflation.
• B) does not depend on the rate of inflation.
• C) is neutral.
• D) does not depend on factors such as capital, labor, and ideas.

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Definitions:

Cartons

Containers usually made of paperboard or cardboard used for storing and transporting goods.

Income Elasticity

The degree to which consumer demand for a product shifts following alterations in their financial earnings.

Inferior

A type of good for which demand decreases as the income of consumers increases.

Normal Good

A good whose demand increases as the income of consumers increases, and vice versa.