We Distinguish Between the Long-Run Aggregate Supply Curve and the Short-Run

question 246

Multiple Choice

We distinguish between the long-run aggregate supply curve and the short-run aggregate supply curve.In the long run

• A) technology is fixed but not in the short run.
• B) the price level is constant but in the short run it fluctuates.
• C) the aggregate supply curve is horizontal while in the short run it is upward sloping.
• D) real GDP equals potential GDP.

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Definitions:

Government Payments

Funds distributed by the government to individuals, businesses, or other governmental entities, which can include subsidies, grants, or welfare payments.

Point Elasticity

A measure of how responsive the quantity demanded or supplied of a good is to a change in its price, calculated at a particular point on the demand or supply curve.

Producer Surplus

The profit producers make over and above the minimum amount they would be willing to accept for selling their goods or services.

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity demanded at the market price.