The Long-Run Aggregate Supply Curve Is Vertical at $18 Trillion

question 38

Multiple Choice

The long-run aggregate supply curve is vertical at $18 trillion but the short-run aggregate supply curve intersects the aggregate demand curve at $19 trillion. We know that

• A) the economy is producing below full employment in the short run, and will adjust by hiring more workers, thus decreasing unemployment.
• B) the price level is too high. The long-run equilibrium will occur with a lower price level.
• C) adjustments will occur so that the long-run aggregate supply equals $19 trillion.
• D) adjustments will occur so that the short-run aggregate supply eventually intersects the aggregate demand curve at $16 trillion.

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Definitions:

Omega-3 Fatty Acids

Essential fatty acids found in various foods, including fish and flaxseeds, known for their anti-inflammatory properties and heart health benefits.

Oily Fish

Refers to fish species high in oil content, often rich in omega-3 fatty acids, which are considered beneficial for cardiovascular health.

Dairy Products

Dairy products are foods or beverages produced from the milk of mammals, typically cows, goats, or sheep, and include items such as cheese, yogurt, and butter.

Feces

Unabsorbed food material and cellular waste that is expelled from the digestive tract.