The Long-Run Aggregate Supply Curve Is Vertical at $12 Trillion

Multiple Choice

The long-run aggregate supply curve is vertical at $12 trillion but the short-run aggregate supply curve intersects the aggregate demand curve at $13 trillion.We know that

A) the economy is producing below full employment in the short run, and will adjust by hiring more workers, thus decreasing unemployment.
B) the price level is too high. The long-run equilibrium will occur with a lower price level.
C) adjustments will occur so that the long-run aggregate supply equals $13 trillion.
D) adjustments will occur so that the short-run aggregate supply eventually intersects the aggregate demand curve at $12 trillion.