The Long-Run Aggregate Supply Curve Is Vertical

question 112

Multiple Choice

The long-run aggregate supply curve is vertical

• A)because the rate of inflation is steady in the long run.
• B)because resource prices eventually rise and fall with product prices.
• C)because product prices tend to increase at a faster rate than resource prices.
• D)only when the money supply increases at the same rate as real GDP.

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Definitions:

Unearned Revenues

Represents income received by a company for goods or services that are yet to be delivered or performed.

Accrued Revenues

Income earned during an accounting period but not yet received or recorded at the statement date, representing future cash receipts.

Annual Depreciation

The amount of depreciation expense allocated for a fixed asset in one year, based on the asset's useful life and cost.

Prepaid Expense

An asset account that represents costs paid in advance for expenses that will be incurred within a future accounting period.