In building a macro model with an AS curve, it is assumed that producers will
A)decrease their prices without changing output.
B)produce as much as possible at the existing price level.
C)increase prices without changing their output.
D)decrease their prices when they expand output.
E)produce more output only if prices rise.

Question

Quizplus · Accepted Answer

In a macroeconomic model with an Aggregate Supply (AS) curve, it is typically assumed that producers will increase output only if prices rise, reflecting the positive relationship between price levels and quantity of output supplied.

In Building a Macro Model with an AS Curve, It