Why Is the Long-Run Aggregate-Supply Curve Vertical

question 144

Multiple Choice

Why is the long-run aggregate-supply curve vertical?

• A) because population grows slowly
• B) because the government controls inflation
• C) because money is neutral
• D) because prices are stable

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Definitions:

Par Common Stock

The face value of a share of stock as stated in the corporate charter.

Cost Method

An accounting method used to value inventory or investments at their original purchase cost.

Treasury Stock

Shares initially offered by a company and then purchased again by that company, lowering the volume of shares that are actively traded on the market.

Par Common Stock

The face value of common stock as stated in the corporate charter, which has no direct correlation to the market value.