The steeper slope of the aggregate supply curve in the long run indicates that an increase in aggregate demand will cause an increase in the price level and an even greater increase in output in the long run.

Question

Quizplus · Accepted Answer

In the long run, the aggregate supply curve is generally considered to be vertical, indicating that changes in aggregate demand will only affect the price level and not the level of output. Therefore, the statement that an increase in aggregate demand will cause an even greater increase in output in the long run is false.

The Steeper Slope of the Aggregate Supply Curve in the Long