When the Long-Run Aggregate Supply Curve Is Drawn as a Vertical

question 115

Multiple Choice

When the long-run aggregate supply curve is drawn as a vertical line,the theorist is assuming that:

• A) the economy tends to full employment in the long run.
• B) the economy tends to produce stable prices in the long run.
• C) the economy is stagnating at a low level of growth.
• D) shifting aggregate demand can change the level of employment in the long run.

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Definitions:

Longitudinal Study

A research design that follows the same subjects over a period of time, allowing for the observation of changes or developments in the subjects.

Cross-Sectional Study

A type of observational study that analyzes data from a population, or a representative subset, at a specific point in time.

Case Studies

In-depth analyses of individuals.

Generalizability

Extent to which the results of a study generalize to, or inform us about, people other than those who were studied.