The belief that changes in price level have no effect on the long-run quantity of final goods and services the economy can produce is illustrated by the

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Business

Kimberly Farmer

18 February, 11:59

The belief that changes in price level have no effect on the long-run quantity of final goods and services the economy can produce is illustrated by the

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Nash · Answer 1

Answer: The options are listed below:

A) upward-sloping aggregate demand curve.

B) downward-sloping aggregate supply curve.

C) long-run vertical aggregate supply curve.

D) short-run upward-sloping aggregate supply curve.

The correct option is C.

Explanation: The degree to which the rising and falling of price level affects the quantity of output demanded is shown by the upward or downward sloping of aggregate demand curves.

The relationship between the price level and the quantity of production of goods and services is shown by the long-run and short-run aggregate supply curves.

The short-run upward-sloping aggregate supply curve will illustrate the idea that the quantity supplied of a commodity increases when the price rises.

While the long-run vertical aggregate supply curve will show the beliefs of economists that in long-run, it is only the labor, capital and technology that can affect the quantity of final goods and services that one economy can produce.