For movements along the long- run aggregate supply curve,
A) the prices of goods and services change while the prices of productive resources hold steady.
B) potential GDP is dependent on the price level.
C) the price level and the money wage rate change by the same percentage.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

In the long-run aggregate supply curve, the price level and the money wage rate change by the same percentage, keeping real wages and potential GDP constant.

For Movements Along the Long- Run Aggregate Supply Curve