In the Long Run,the Aggregate Supply Curve Is Vertical Because

question 54

Multiple Choice

In the long run,the aggregate supply curve is vertical because

• A) in the long run, potential output is less than actual output.
• B) input prices and output prices are unaffected by changes in aggregate demand.
• C) aggregate demand becomes horizontal.
• D) input prices change by the same proportion as product prices, leaving output levels unchanged.
• E) excess capacity allows firms more resource flexibility.

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Definitions:

Transmittal

The process or document involved in sending something from one person or place to another.

FICA-OASDI

Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance, a U.S. payroll tax funding Social Security.

FUTA

Stands for Federal Unemployment Tax Act, which imposes a payroll tax on employers to help fund state workforce agencies.

SUTA

State Unemployment Tax Act; a type of payroll tax that employers must pay to the state government to fund unemployment benefits.