We Draw the Long-Run Aggregate Supply Curve as a Vertical

question 290

Multiple Choice

We draw the long-run aggregate supply curve as a vertical line to reflect the fact that

• A) the productive capacity of the economy never changes after full adjustment has occurred.
• B) changes in the price level do not alter the level of long-run real GDP after full adjustment has occurred.
• C) technology and resource endowments do not affect long-run real GDP after full adjustment has occurred.
• D) an accurate depiction of the production possibilities curve is vertical after full adjustment has occurred.

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Definitions:

Cash Dividends

Payments made by a company to its shareholders from its profits or reserves.

Date of Record

The date of record is a cut-off date set by a corporation to determine which shareholders are eligible to receive a dividend or distribution.

Liability

An obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer of assets, provision of services, or other yielding of economic benefits in the future.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a certificate or instrument.