Multiple Choice
Use the following to answer questions.
Exhibit: Aggregate Production Function, Labor Market, and LRAS 
-(Exhibit: Aggregate Production Function, Labor Market, and LRAS) In Panel (c) , the long-run aggregate supply curve is vertical because
A) of diminishing marginal returns.
B) of sticky wages and prices.
C) perfectly flexible nominal wages in the long run allow any number of wage/price level combinations to result in a real wage that equilibrates the labor market.
D) the economy is not constrained by diminishing marginal returns since it can change the quantities of all factors of production.
Correct Answer:
Verified
Correct Answer:
Verified
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