What is sometimes called the "long- run aggregate supply curve" relates the aggregate price level to real GDP
A)when technology is allowed to change.
B)in the short run.
C)after factor prices have fully adjusted to eliminate output gaps.
D)when wages are in adjustment but prices are unstable.
E)when national income is at less than potential income.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is vertical, indicating that in the long run, real GDP is determined by factors such as technology and resources, and is not affected by changes in the price level. This occurs after factor prices have fully adjusted, eliminating any output gaps.

What Is Sometimes Called the "Long- Run Aggregate Supply Curve