Question

The​ long-run aggregate supply curve

Part 2
A.
shows the various amounts of real output businesses are willing to consume at each price level.
B.
is downward sloping because a higher price level causes businesses and consumers to reduce spending.
C.
is vertical because changes in the price level have no effect on real output.
D.
is vertical because a change in real GDP has no effect on the price level.

Answer 1

[AI-generated answer — Bot]

C.

is vertical because changes in the price level have no effect on real output.

Answer 2

[AI-generated answer — Step-by-Step Bot]

The correct answer is C. The long-run aggregate supply curve is vertical because changes in the price level have no effect on real output. In the long run, the economy operates at its potential level of output, also known as potential GDP, which is determined by factors such as the labor force, capital stock, and technology. Changes in the price level do not affect these long-run determinants of output, so the long-run aggregate supply curve remains vertical.