The aggregate supply curve is
A)vertical in the long run and slopes upward in the short run.
B)upward sloping in the long run and vertical in the short run.
C)vertical in the short run and in the long run.
D)upward sloping in the short run and in the long run.

Question

Quizplus · Accepted Answer

In the long run, the aggregate supply curve is vertical as the economy reaches its full potential output level, but in the short run, it slopes upward as firms can increase production in response to higher prices due to sticky wages and prices.

The Aggregate Supply Curve Is