The supply of resources, level of technology, and the quality of an economy's institutional arrangements provide the constraint that determines the shape of the
A) short-run aggregate supply curve.
B) long-run aggregate supply curve.
C) supply of loanable funds.
D) aggregate demand curve.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is determined by the supply of resources, level of technology, and institutional arrangements in an economy. These factors affect the economy's potential output, which is reflected in the long-run aggregate supply curve. The short-run aggregate supply curve is affected by temporary factors such as changes in input prices and technology, and the aggregate demand curve is affected by factors such as consumption, investment, government spending, and net exports. The supply of loanable funds is determined by factors such as saving rates and the availability of credit.

The Supply of Resources, Level of Technology, and the Quality