The aggregate supply curve is _____ in the short run, but _____ in the long run.
A)upward sloping; vertical
B)upward sloping; horizontal
C)downward sloping; vertical
D)downward sloping; horizontal

Question

Quizplus · Accepted Answer

In the short run, the aggregate supply curve is upward sloping because as prices increase, producers are willing and able to supply more goods and services. In the long run, the aggregate supply curve is vertical, reflecting the idea that the economy's productive capacity is determined by factors other than the price level, such as technology and resources.

The Aggregate Supply Curve Is _____ in the Short Run