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True or False: If firms adjusted their prices every day, then the short-run aggregate-supply curve would be horizontal.

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User Glborges
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4 votes

Answer:

False

Step-by-step explanation:

The short run aggregate supply (SRAS) curve and the long term aggregate supply (LRAS) curve differ because prices and wages are sticky or inflexible in the short run. In the long run, that inflexibility disappears. If prices could be adjusted everyday, the SRAS curve would tend to adjust or be much more similar than the LRAS curve, but that doesn't mean that the LRAS curve is horizontal. The slope of the LRAS curve will not change if the SRAS curve is similar or adjusts more rapidly.

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User Andiba
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