Final answer:
The factors of production are fully utilized along the vertical, not horizontal, portion of the Keynesian long-run aggregate supply curve, which represents an economy at full-employment GDP.
Step-by-step explanation:
The correct answer to which of the following is true along the horizontal portion of the Keynesian long-run aggregate supply curve is: A. The factors of production are fully utilized. During the horizontal portion, there is insufficient demand to employ all resources, leading to high levels of unemployment and factories not running at full capacity. However, along the vertical portion of the curve, which represents an economy at potential GDP, the factors of production, such as labor and machinery, are fully employed, and the economy is at what's sometimes called full-employment GDP. There is no horizontal portion in the long-run aggregate supply curve according to Keynesian theory; the long-run aggregate supply curve is vertical in Keynesian analysis.