The aggregate supply curve shows the relationship of prices to:
A) sales.
B) the quantity of output people want to buy.
C) the quantity of output producers are willing to provide.
D) both the amount of output people want to buy and the amount of output producers want to provide.

Question

Quizplus · Accepted Answer

The aggregate supply curve shows the relationship between the price level and the quantity of output that producers are willing to provide, so choice C is the correct answer. The aggregate demand curve shows the relationship between the price level and the quantity of output that people want to buy, so choice B is not correct. Choice A is incorrect because the aggregate supply curve does not directly show the relationship between prices and sales, although changes in prices can affect sales. Similarly, choice D is incorrect because the aggregate supply curve only shows the quantity of output that producers are willing to provide, not the quantity of output that people want to buy.

The Aggregate Supply Curve Shows the Relationship of Prices To