The long-run aggregate supply curve represents:
A) potential output in the economy.
B) the level of output possible if the economy is operating at full capacity.
C) a production function for the entire economy.
D) All of these are true.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve represents both potential output in the economy and the level of output possible if the economy is operating at full capacity, which in turn reflects the production function for the entire economy. Therefore, all of the statements are true.

The Long-Run Aggregate Supply Curve Represents