Consider the AD/AS Model

question 65

Multiple Choice

Consider the AD/AS model.In the long run,after factor prices have fully adjusted to any output gaps,real GDP

• A)and the price level are determined by aggregate demand.
• B)and the price level are determined by "long-run aggregate supply."
• C)is determined by aggregate demand and the price level by potential output.
• D)is determined by potential output and the price level by aggregate demand.
• E)is determined by AD and the price level is determined by the AS curve.

---

Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of that good or service that suppliers are willing and able to provide at each price level.

Auto Assembly

The process of putting together various components of automobiles in a factory setting, an essential part of the automotive manufacturing industry.

Robots

Mechanical or virtual artificial agents, typically programmable by a computer, that can perform tasks automatically or with minimal human intervention.

Quantity Supplied

The complete measure of a good or service that suppliers are willing and capable of selling at an identified price throughout a specified duration.