The Long-Run Aggregate Supply Curve Is Vertical

question 112

Multiple Choice

The long-run aggregate supply curve is vertical

• A)because the rate of inflation is steady in the long run.
• B)because resource prices eventually rise and fall with product prices.
• C)because product prices tend to increase at a faster rate than resource prices.
• D)only when the money supply increases at the same rate as real GDP.

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Definitions:

After-tax

The amount of money that remains following the deduction of taxes from income, profit, or revenue.

Annual Dividend

The total dividend payment a company distributes to its shareholders annually.

Rate of Return

The appreciation or depreciation in value of an investment over an agreed period, conveyed as a percentage of the investment's starting value.

Dividend Increase

An action taken by a company's board of directors to raise the amount paid out to shareholders in dividends.