Which of the Following Characterizes the Long-Run Aggregate Supply Curve

question 18

Multiple Choice

Which of the following characterizes the long-run aggregate supply curve?

• A)It is determined by the things that determine output in the classical model.
• B)It is located at the point where unemployment is zero.
• C)It shifts to the right when the price level increases.
• D)It is positioned at the point where the economy would cease to grow.

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Definitions:

Equilibrium Price

The price at which the quantity of goods suppliers are willing to sell equals the quantity consumers are willing to buy, leading to a balance of demand and supply.

Consumer Surplus

The variance between a consumer's maximum price readiness for a product or service and the real payment made.

Marginal Buyer

The consumer whose desire or need for a product is the least among all buyers, often determining the highest price they're willing to pay in a market.

Demand Curve

A chart that illustrates the connection between a good's price and the amount that consumers want to purchase.