18. Refer to the above diagram. Assume that nominal wages initially are set on the basis of the price level P2 and that the economy initially is operating at its full-employment level of output Qf. In terms of this diagram, the long-run aggregate supply curve:
is a vertical line extending from Qf upward through e, b, and d.
[Correct answer NOT selected]
may be either AS1, AS2, or AS3 depending on whether the price level is P1, P2, or P3.
is a horizontal line extending from P2 rightward through f , b, and g.