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

question 144

True/False

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

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.

Equilibrium Quantity

At the market equilibrium price, the amount of goods or services that are supplied matches the amount that is demanded.

Equilibrium Price

The market price at which the quantity demanded of a good equals the quantity supplied, leading to a state of balance in the market.

Government Subsidy

Financial assistance provided by the government to businesses, individuals, or other governmental units in support of an activity deemed beneficial to the public.