The position of the long-run aggregate supply curve
A)is determined by resource usage and technology.
B)is at the point where the unemployment rate is zero.
C)shifts to the right when the money supply increases.
D)is at the point where the economy would cease to grow.

Question

Quizplus · Accepted Answer

The position of the long-run aggregate supply curve is determined by resource usage and technology. The LRAS represents the potential output of an economy in the long run, given the available resources and technology. Therefore, any changes in these factors would cause the LRAS curve to shift. Option B is incorrect because the LRAS curve is not determined by the unemployment rate. Option C is incorrect because changes in the money supply affect the short-run aggregate supply (SRAS) curve, not the LRAS curve. Option D is incorrect because the LRAS curve represents the potential output of an economy, which can continue to grow in the long run.

The Position of the Long-Run Aggregate Supply Curve