The Long-Run Aggregate Supply Curve Is

question 17

Multiple Choice

The long-run aggregate supply curve is

• A) vertical at the level of full-employment output.
• B) horizontal at the going-price level.
• C) illustrating a positive relationship between price and output.
• D) illustrating a negative relationship between price and output.
• E) the same as the short-run aggregate supply curve.

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Definitions:

Retained Earnings

The portion of a company’s profit that is held back and not distributed to shareholders as dividends, to be reinvested in the business.

EBIT

Earnings Before Interest and Taxes - an indicator of a company's profitability that calculates income without tax expenses and interest expenses.

Straight Line

A method of allocating the cost of a tangible asset over its useful life in equal installments.

Net Income

The net income a company achieves once all costs and taxes are subtracted from its total revenues.