The Long-Run Aggregate Supply Curve Is Vertical Because

question 134

Multiple Choice

The long-run aggregate supply curve is vertical because

• A) at full employment, prices are stable.
• B) there is no cyclical inflation.
• C) potential GDP is independent of the price level.
• D) the money wage rate increases faster than the price level.

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Definitions:

Affects

the experience of feeling or emotion in psychology.

Object Relations

A psychoanalytic theory focusing on how individuals relate to others and objects in their environment, shaped by early family interactions.

Ideology

A coherent set of beliefs, values, and norms that defines the way a group thinks about the world and their place within it.

Expectations

Beliefs or anticipations about the way events, situations, or behaviors will unfold in the future.