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The Long-Run Aggregate Supply Curve Shows the Maximum Output Possible

question 37

True/False

The long-run aggregate supply curve shows the maximum output possible for an economy and, therefore, does not shift.


Definitions:

Interest-Rate Sensitivity

The degree to which the price of an investment, often a bond, responds to changes in interest rates.

Bond Prices

The market value of bonds, which inversely fluctuates with interest rates: when rates go up, bond prices fall, and vice versa.

Coupon Rate

The yearly interest rate yielded by a bond, shown as a percent of its nominal value.

Price Sensitive

Characteristic of information or news that could influence the price of securities if it were made public.

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