Because the price level does not affect the long-run determinants of real GDP, the long-run aggregate-supply is vertical.

Question

Quizplus · Accepted Answer

In the long run, the aggregate supply is considered vertical because real GDP is determined by factors such as capital, labor, and technology, rather than by the price level. This implies that changes in the price level do not affect the long-run output of the economy.

Because the Price Level Does Not Affect the Long-Run Determinants