Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 20 - Aggregate Demand and Aggregate Supply - Questions For Review - Page 453: 4

Answer

The long-run aggregate supply is vertical due to the fact that in the long run, an economy's supply of goods and services depends on its labor, resources, capital, raw materials and technology and equipment used to turn these inputs into goods and services. Price level has no impact on these long-run objects of real GDP.

Work Step by Step

Understand that in the long run, the supply components mentioned above are not short run such as technology. Price will not alter these objectives in the long run.
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