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:

Inductive Reactance

The opposition to the change of current flow due to inductance in an AC circuit, measured in Ohms.

Apparent Power

The total power in an AC circuit, both used and unused, measured in Volt-Amperes (VA) and combining both active and reactive power components.

Parallel Circuit

A circuit in which components are connected across common points or junctions, providing multiple paths for current.

Inductive Reactance

The opposition to the change in current flow in an AC circuit, caused by the inductance of the circuit elements.