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AP Macroeconomics Practice Quiz: Long-Run Aggregate Supply (LRAS)

Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026

Test your understanding with short quizzes. This quiz has 14 questions to check your progress.

Question 1 of 14

According to the provided text, what is the primary characteristic of the long run in macroeconomics?

All Questions (14)

According to the provided text, what is the primary characteristic of the long run in macroeconomics?

A) Some input prices are fixed.

B) All prices and wages are fully flexible.

C) There is a stable trade-off between inflation and unemployment.

D) Output is determined solely by aggregate demand.

Correct Answer: B

The content explicitly states, 'In the long run all prices and wages are fully flexible, while in the short run some input prices are fixed.'

How is the long-run aggregate supply (LRAS) curve depicted on a standard price level vs. real GDP graph?

A) As a vertical line.

B) As a horizontal line.

C) As an upward-sloping curve.

D) As a downward-sloping curve.

Correct Answer: A

The text specifies that 'The LRAS curve is vertical at the full-employment level of output...'

The vertical shape of the long-run aggregate supply (LRAS) curve is a direct consequence of which economic condition?

A) Fixed input prices in the short run.

B) The full adjustment of wages and prices in the long run.

C) Government intervention in the economy.

D) The existence of a trade-off between inflation and unemployment.

Correct Answer: B

The provided content explains that the LRAS curve is vertical 'because in the long run wages and prices fully adjust.'

The long-run aggregate supply (LRAS) curve is conceptually analogous to which other economic model because they both represent maximum sustainable capacity?

A) The Phillips Curve

B) The Aggregate Demand Curve

C) The Production Possibilities Curve (PPC)

D) The Money Market Graph

Correct Answer: C

The text states, 'The LRAS curve corresponds to the production possibilities curve (PPC) because they both represent maximum sustainable capacity.'

What does the term 'maximum sustainable capacity' refer to in the context of the LRAS?

A) The output level achieved during a short-run economic boom.

B) The total output produced when all resources are fully employed.

C) The minimum output required to keep unemployment low.

D) The level of production where prices are completely stable.

Correct Answer: B

The definition provided is: 'Maximum sustainable capacity is the total output an economic system will produce over a set period of time if all resources are fully employed.'

Which of the following is a key implication of the flexibility of long-run prices and wages?

A) A persistent trade-off between inflation and unemployment.

B) The inability of the economy to achieve full employment.

C) The lack of a long-run trade-off between inflation and unemployment.

D) The short-run aggregate supply curve becomes vertical.

Correct Answer: C

The text clearly states, 'A consequence of flexible long-run prices and wages is the lack of a long-run trade-off between inflation and unemployment.'

What is the fundamental difference between the short run and the long run as defined in the text?

A) The level of government spending.

B) The flexibility of certain input prices.

C) The slope of the aggregate demand curve.

D) The total amount of resources available.

Correct Answer: B

The text distinguishes the two periods by stating that 'in the long run all prices and wages are fully flexible, while in the short run some input prices are fixed.'

The position of the vertical LRAS curve on a graph represents the economy's:

A) current inflation rate.

B) short-run equilibrium output.

C) full-employment level of output.

D) level of cyclical unemployment.

Correct Answer: C

The content specifies that 'The LRAS curve is vertical at the full-employment level of output.'

An economy operating on its long-run aggregate supply curve is producing at a level consistent with a point on its:

A) upward-sloping short-run aggregate supply curve only.

B) production possibilities curve.

C) aggregate demand curve only.

D) Phillips curve trade-off.

Correct Answer: B

The text establishes a direct link: 'The LRAS curve corresponds to the production possibilities curve (PPC) because they both represent maximum sustainable capacity.' Operating on the LRAS means the economy is on its PPC.

In the short run, some input prices are considered to be:

A) fully flexible.

B) fixed.

C) determined by the price level.

D) irrelevant to supply decisions.

Correct Answer: B

The text defines the short run as a period where 'some input prices are fixed.'

If an economy is at its long-run equilibrium, a sudden increase in the overall price level will, in the long run, lead to:

A) a permanent increase in real output.

B) a proportional increase in wages, leaving real output unchanged.

C) a permanent decrease in unemployment.

D) a shift of the LRAS curve to the right.

Correct Answer: B

Because the LRAS is vertical and wages are fully flexible in the long run, a change in the price level will be met with a corresponding change in nominal wages and other input prices. This keeps real output constant at the full-employment level.

The concept of a vertical long-run aggregate supply curve implies that changes in aggregate demand primarily affect which variable in the long run?

A) The price level.

B) The level of real output.

C) The quantity and quality of resources.

D) The short-run aggregate supply.

Correct Answer: A

Since the LRAS curve is vertical at the full-employment level of output, shifts in aggregate demand along the LRAS will only change the price level, not the long-run quantity of output.

The long-run aggregate supply represents the level of output an economy produces when:

A) the price level is fixed by the government.

B) there is significant cyclical unemployment.

C) all resources are fully and efficiently employed.

D) consumer spending is at its peak.

Correct Answer: C

The LRAS is at the full-employment level of output, which corresponds to the maximum sustainable capacity achieved when 'all resources are fully employed.'

Which of the following statements is true for the long run but NOT for the short run, based on the provided text?

A) Some input prices are fixed.

B) There is a trade-off between inflation and unemployment.

C) Wages and prices are fully flexible.

D) The aggregate supply curve is upward-sloping.

Correct Answer: C

The text explicitly contrasts the two periods: 'in the long run all prices and wages are fully flexible, while in the short run some input prices are fixed.' Therefore, full flexibility is unique to the long run.