In the aggregate supply relation, an increase in current output causes:
A) an increase in the expected price level and an upward shift of the AS curve.
B) a shift of the aggregate supply curve.
C) a change in the expected price level this year.
D) an increase in the current price level.
E) an increase in the markup over labour costs.

Question

Quizplus · Accepted Answer

An increase in current output typically leads to an increase in the current price level due to higher demand for goods and services, which can cause prices to rise.

In the Aggregate Supply Relation, an Increase in Current Output