The economy's long-run AS curve assumes that wages and other resource prices:
A) eventually rise and fall to match upward or downward changes in the price level.
B) are flexible upward but inflexible downward.
C) rise and fall more rapidly than the price level.
D) are relatively inflexible both upward and downward.

Question

Quizplus · Accepted Answer

In the long run, wages and resource prices are assumed to be flexible and adjust to changes in the price level, allowing the economy to return to its natural level of output.

The Economy's Long-Run AS Curve Assumes That Wages and Other