The Economy's Long-Run Aggregate Supply Curve

question 100

Multiple Choice

The economy's long-run aggregate supply curve

• A) slopes upward and to the right.
• B) is vertical.
• C) is horizontal.
• D) slopes downward and to the right.

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Definitions:

Money Demanded

The total amount of money that households and businesses wish to hold at any given interest rate, at a specific time.

Federal Funds Rate

The interest rate at which banks lend reserves to each other overnight, serving as a key monetary policy tool of the Federal Reserve.

Open-Market Operations

The purchase and sale of U.S. government bonds by the Fed.

Fed

Short for the Federal Reserve System, the central banking system of the United States responsible for monetary policy.