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Money Supply and Inflation

At full emplo...

Question

At full employment level, the aggregate supply function will be a _____ straight line.

A

vertical

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B

horizontal

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C

steeper

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D

flatter

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Solution

The correct option is A vertical
Aggregate supply function is nothing but a function where the productive is maximum. It is represented by a vertical straight line on the graph. Hence, at full employment level, the aggregate supply function will be a vertical straight line.

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