The short- run aggregate supply curve is the relationship between the quantity of real GDP supplied and
A)the price level.
B)the real interest rate.
C)real income.
D)the inflation rate.
E)the quantity of real GDP demanded.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve shows the relationship between the quantity of real GDP supplied by firms and the price level in the economy. As the price level increases, firms are willing to supply more output in the short run due to higher profits. Conversely, a decrease in the price level leads to less real GDP supplied. Therefore, the correct answer is A) the price level.

The Short- Run Aggregate Supply Curve Is the Relationship Between