Author Question: What is most affected by the expected rate or pace of economic growth? A) investment spending B) ... (Read 92 times)

madam-professor · **on:** Jun 30, 2018

What is most affected by the expected rate or pace of economic growth?

A) investment spending B) government purchases
C) unemployment D) exports

Question 2

Explain why the long-run aggregate supply curve is vertical.

What will be an ideal response?

macmac · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A

Answer to Question 2

In the long run, the economy operates at full employment, and changes in the price level do not affect employment. Because the level of full-employment output does not depend on the price level, long-run aggregate supply is unaffected by the price level, and so is vertical.