In the Extended Aggregate Demand-Aggregate Supply Model

question 260

Multiple Choice

In the extended aggregate demand-aggregate supply model,

• A) long-run equilibrium occurs wherever the aggregate demand curve intersects the short-run aggregate supply curve.
• B) the long-run aggregate supply curve is horizontal.
• C) the price level is the same regardless of the location of the aggregate demand curve.
• D) long-run equilibrium occurs at the intersection of the aggregate demand curve, the short- run aggregate supply curve, and the long-run aggregate supply curve.

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Definitions:

Improving Technology

The process of developing and applying new and better techniques, tools, and machines to increase efficiency, productivity, and quality in production or services.

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Wealth in the form of money or other assets owned by a person or organization or available for purposes such as starting a company or investing.

Factor Suitability

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Law Of Increasing Cost

An economic principle that states as production of a good expands, reflecting increased demand or supply shifts, the cost of producing an additional unit of output increases.