which of the following is true about the long-run aggregate supply curve?
Question
which of the following is true about the long-run aggregate supply curve?
Solution
The long-run aggregate supply curve is a vertical line at the potential level of national income. This means that in the long run, the total amount of goods and services that an economy can produce is fixed, regardless of the price level. This is because, in the long run, all resources are fully utilized and the economy is at full employment. Therefore, changes in demand only affect the price level, not the total output.
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