One Reason the Long-Run Aggregate Supply Curve Has the Slope

question 56

Multiple Choice

One reason the long-run aggregate supply curve has the slope it does is due to the fact that:

• A)if current output equals potential output, the short-run aggregate supply curve is stable.
• B)that inflation is zero in the long run.
• C)over long periods of time the economy moves to its potential level of output with higher inflation.
• D)over long periods of time the economy moves to its potential level of output with lower inflation.

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Definitions:

Common Shares

Equity securities that represent ownership in a company, entitling holders to a share of the corporation's profit via dividends and voting rights.

Investment Sold

The act of disposing of an investment asset, which can include stocks, bonds, or real estate, usually to generate cash or realize gains.

Equity Method

An accounting technique used to record investments in associate companies, where the investment's value is adjusted in accordance with changes in the investee's net assets.

Voting Shares

Shares of a company's stock that grant the shareholder the right to vote on company matters, typically in the election of the board of directors.