Question

The long run aggregates supply curve is?vertical at the full employment level of real gdp. 2) horizontal at the full employment level of real gdp.

Answer 1

A curve that indicates the connection between the charge level and real GDP that might be supplied if all costs, such as nominal wages, had been fully flexible; price can alternate alongside the LRAS, but the output cannot due to the fact that output displays the whole employment output.

The long-run aggregate supply curve is vertical because it's miles the amount that might be produced as soon as costs are fully capable of modify. The LRAS curve illustrates the natural rate of output (Yn)- the amount of output the economy produces while unemployment is at its natural fee.

The long-run mixture delivers curve is a vertical line on the ability degree of output. The intersection of the economic system's combination demand and lengthy-run combination supply curves determines its equilibrium real GDP and price level ultimately.

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