The Long-Run Aggregate Supply Curve Is Vertical Because

question 52

Multiple Choice

The long-run aggregate supply curve is vertical because

• A) many inputs are fixed.
• B) it incorporates the assumptions of Keynesian theory.
• C) the economy will gravitate to the position of full employment when all variables are flexible.
• D) wages, prices, and interest rates are not flexible in the long run.

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Definitions:

At-risk

Pertains to the amount of money invested in an activity that could be lost, used in tax contexts to limit deductions.

AMT Adjustment

A modification required under the Alternative Minimum Tax rules to convert regular taxable income into AMT taxable income.

AMT Depreciation

Depreciation methods under the Alternative Minimum Tax system, which can differ from regular tax depreciation in terms of rates and methods.

AMT Depreciation Adjustment

Adjustments for depreciation that are required when calculating the Alternative Minimum Tax, a parallel tax system designed to ensure that certain taxpayers pay a minimum amount of tax.