Figure 8-5 Panel (A) Shows an Economy's Aggregate Production

question 67

Multiple Choice

Figure 8-5 Panel (a) shows an economy's aggregate production function, Panel (b) shows the labor market and Panel (c) shows the economy's long-run aggregate supply curve.
-Refer to Figure 8-5. In Panel (c) , the long-run aggregate supply curve is vertical because

• A) of diminishing marginal returns.
• B) of sticky wages and prices.
• C) perfectly flexible nominal wages in the long run allow any number of wage/price level combinations to result in a real wage that equilibrates the labor market.
• D) the economy is not constrained by diminishing marginal returns since it can change the quantities of all factors of production.

---

Definitions:

Passive-aggressive

A behavior characterized by indirect expression of hostility or resentment, often through procrastination, sullenness, or intentional inefficiency.

Directive-assertive

A communication style characterized by direct expressions of needs and wants, often with the expectation of compliance from others.

Passive

A state of acceptance or non-resistance to external events or situations, often implying a lack of active response.

Aggressive

Characterized by or resulting from a forceful and sometimes overly assertive pursuit of one's goals.