With the price level on the vertical axis and output on the horizontal axis, the short-run aggregate-supply curve
A)is vertical.
B)is downward-sloping.
C)is horizontal.
D)is upward-sloping.

Question

Quizplus · Accepted Answer

The short-run aggregate-supply curve is upward-sloping, indicating that as output increases, the price level also increases. This is because in the short-run, firms may face constraints that prevent them from increasing input production and thereby causing an increase in output. As a result, firms may simply increase the price level in response to increased demand for their products.

With the Price Level on the Vertical Axis and Output