Which of the following characterizes the long-run aggregate supply curve?
A)It is determined by the things that determine output in the classical model.
B)It is located at the point where unemployment is zero.
C)It shifts to the right when the price level increases.
D)It is positioned at the point where the economy would cease to grow.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is determined by the factors of production and technology in the classical model, which determine potential output. It is not located at zero unemployment or affected by changes in the price level like the short-run aggregate supply curve. It also does not represent the point where the economy would cease to grow.

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