If output and inflation are unrelated in the long run, the long-run aggregate supply curve must be:
A)Horizontal
B)Vertical
C)Upward sloping
D)Non-existent

Question

Quizplus · Accepted Answer

If output and inflation are unrelated in the long run, it implies that changes in aggregate demand will only affect the price level and not the level of output. Therefore, the long-run aggregate supply curve will be vertical at the potential output level, indicating that changes in aggregate demand will only cause changes in the price level and not in the level of output.

If Output and Inflation Are Unrelated in the Long Run