The aggregate-supply curve is vertical in the long run because:
A)of the classical dichotomy and money neutrality
B)aggregate demand is downward-sloping
C)overall output goes up when prices go up
D)overall output goes down when prices go up

Question

Quizplus · Accepted Answer

The aggregate-supply curve is vertical in the long run due to the classical dichotomy and money neutrality, which suggest that real variables (like output) are not affected by nominal variables (like the money supply) in the long run. This implies that in the long run, the economy's output is determined by factors such as technology and resources, not by the price level.

The Aggregate-Supply Curve Is Vertical in the Long Run Because