When the Long-Run Aggregate Supply Curve Is Drawn as a Vertical

question 70

Multiple Choice

When the long-run aggregate supply curve is drawn as a vertical line, the theorist is assuming that

• A) the economy tends to move toward full employment in the long run.
• B) the economy tends to produce stable prices in the long run.
• C) the economy is stagnating at a low level of growth.
• D) shifting aggregate demand can change the level of employment in the long run.

Understand the elasticity of supply and its variance over the short and long term.

Apply the concepts of elasticity to evaluate market responses to external shocks.

Understand the relationship between demand elasticity and total revenue for firms.

Understand the processes involved in bone growth and ossification.

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