A Vertical Line Showing the Economy's Potential Is Called The

question 133

Multiple Choice

A vertical line showing the economy's potential is called the:

• A)aggregate demand curve.
• B)long-run aggregate supply line.
• C)short-run equilibrium output line.
• D)short-run aggregate supply line.

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market, resulting in no surplus or shortage.

Market Mechanism

Tendency in a free market for price to change until the market clears.

Federal Government

The national government of a federal state, which shares sovereignty with the constituent states or provinces and is typically responsible for national defense, foreign policy, and regulating inter-state commerce.

Equilibrium Price

The market price at which the quantity of a good demanded equals the quantity supplied, leading to market equilibrium.