What is the slope of the long-run aggregate supply curve?
Question
What is the slope of the long-run aggregate supply curve?
Solution
The slope of the long-run aggregate supply curve is vertical. This means that it does not have a slope in the traditional sense. The reason for this is that in the long run, the economy's total output of goods and services (its real GDP) is determined by the availability and productivity of its labor, capital, and natural resources and by the level of technology. Changes in the price level do not affect these factors in the long run, so the long-run aggregate supply is not affected by changes in the price level. Therefore, the long-run aggregate supply curve is vertical.
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