The _____ curve shows the positive relationship between the aggregate price level and the quantity of aggregate output supplied when wages and prices are not fully flexible.
A) aggregate demand
B) short-run aggregate supply
C) aggregate spending
D) long-run aggregate supply

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve shows the positive relationship between the aggregate price level and the quantity of aggregate output supplied when wages and prices are not fully flexible. This means that when prices rise but wages remain unchanged, firms are willing to supply more output because their production costs have not yet increased. The short-run aggregate supply curve is upward sloping because firms face increasing marginal costs as they increase their production.

The _____ Curve Shows the Positive Relationship Between the Aggregate