If the Long-Run Aggregate Supply Curve Is Vertical, Fiscal Policy

question 18

True/False

If the long-run aggregate supply curve is vertical, fiscal policy will have no effect on output.

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Definitions:

American Way

A phrase that refers to the lifestyle, traditions, and values commonly associated with life in the United States.

Hoovervilles

Makeshift shantytowns built by homeless people during the Great Depression in the United States, named after President Herbert Hoover.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, leading to high unemployment and financial distress.

Reconstruction Finance Corporation

A government corporation in the United States that provided financial support to banks, railroads, and other businesses to stimulate the economy during the Great Depression.