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Subject - Economics:

Macroeconomics

MCQ - 78-4088

Question:

Which of the following best describes a key difference between the short-run and long-run aggregate supply curve?

  1. Short-run aggregate supply is upward sloping as nominal wages quickly respond to price level changes.
  2. Long-run aggregate supply is upward sloping as nominal wages quickly respond to price level changes.
  3. Short-run aggregate supply is vertical as nominal wages quickly respond to price level changes.
  4. Long-run aggregate supply is upward sloping as nominal wages quickly respond to price level changes.
  5. Long-run aggregate supply is vertical as nominal wages do not quickly respond to price level changes.

Correct Answer: D

Explanation:

The short-run AS curve is upward sloping because when AD increases, the prices of goods and services rise faster than wages. This results in a profit opportunity for producers to increase output. In the long run, wages have time to fully respond to changes in the price level.

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269 MCQ for effective preparation of the test of Macroeconomics of Economics section.

Read the MCQ statement: Which of the following best describes a key difference between the short-run and long-run aggregate supply curve? , keenly and apply the method you have learn through the video lessons for Macroeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 78-4088.

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