According the short- run aggregate supply curve, the level of overall economic activity:
A) is negatively affected by increases in the price level.
B) is not affected by increases in aggregate demand.
C) is positively affected by increases in the price level.
D) is not affected by increases in the price level.

Question

Quizplus · Accepted Answer

According to the short-run aggregate supply curve, the level of overall economic activity is positively affected by increases in the price level. As prices rise, firms can increase production and profits, leading to an increase in overall economic activity.

According the Short- Run Aggregate Supply Curve, the Level of Overall