If Full-Employment GDP Is Equal to $1

question 170

Multiple Choice

If full-employment GDP is equal to $1.9 trillion and the current price level is 130, what does the long-run aggregate supply curve look like?

• A)It is a horizontal line at 130 of real GDP.
• B)It is a vertical line at a level of real GDP below $1.9 trillion.
• C)It is a vertical line at $1.9 trillion of real GDP.
• D)It is a vertical line at a price level of 130.
• E)It is a horizontal line at a price level of 130.

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Definitions:

Production Function

A mathematical representation that describes the relationship between inputs used in production and the output of goods or services.

Profit Maximization

Profit maximization is an economic principle where businesses aim to achieve the highest profit possible by adjusting production levels, pricing, and other operational decisions.

Profit Maximization

The procedure a corporation uses to ascertain the optimal price and quantity of production for maximum earnings.

Production Function

An economic model expressing the relationship between inputs (like labor and capital) and the quantity of output produced.