Refer to the above diagram.Assume that nominal wages initially are set on the basis of the price level P2 and that the economy initially is operating at its full-employment level of output Qf.In terms of this diagram, the long-run aggregate supply curve:
A) is AS2.
B) is a vertical line extending from Qf upward through e, b, and d.
C) may be either AS1, AS2, or AS3 depending on whether the price level is P1, P2, or P3.
D) is a horizontal line extending from P2 rightward through f, b, and g.
Correct Answer:
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