Which of the following characterizes the long-run aggregate supply curve?
A)It is horizontal.
B)It shows a positive relationship between price level and output.
C)It demonstrates the importance of money in the economy.
D)It shows that money does not influence real GDP in the long run.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is vertical, indicating that in the long run, the economy's output is determined by factors such as technology and resources, not by the price level. Thus, money does not influence real GDP in the long run.

Which of the Following Characterizes the Long-Run Aggregate Supply Curve