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Because the Price Level Does Not Affect the Long-Run Determinants

question 144

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Because the price level does not affect the long-run determinants of real GDP, the long-run aggregate-supply is vertical.


Definitions:

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to some numbers more than others.

FOB Shipping Point

This term indicates that the buyer is responsible for the goods and their shipping costs as soon as the goods leave the seller's premises.

Net Income

The total earnings of a company after all expenses and taxes have been subtracted from total revenue.

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