Respuesta :
If Qf is potential GDP, wages and prices are flexible, then the long-run aggregate supply curve will be a vertical line at Qf.
In a free market economy, wages and prices are determined by the forces of supply and demand. When the demand for a good or service is high, the prices will be high as well. When the demand is low, the price will be low.
The same is true for wages. When the demand for labor is high, wages will be high. When the demand for labor is low, wages will be low. As productivity rises or the price of essential inputs declines, the aggregate supply curve shifts to the right, allowing for a combination of lower inflation, higher production, and lower unemployment.
Hence, the correct option is "second".
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