Which of the following provides an accurate description regarding the slope of the short-run aggregate supply curve?
A) The negative slope of the short-run aggregate supply curve is flatter the more flexible prices are or steeper the more rigid prices are.
B) The negative slope of the short-run aggregate supply curve is steeper the more flexible prices are or flatter the more rigid prices are.
C) The positive slope of the short-run aggregate supply curve is flatter the more flexible prices are or steeper the more rigid prices are.
D) The positive slope of the short-run aggregate supply curve is steeper the more flexible prices are or flatter the more rigid prices are.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve is positively sloped, and it becomes steeper when prices are more flexible because firms can adjust prices more easily in response to changes in demand. Conversely, it is flatter when prices are more rigid, as firms are less able to adjust prices quickly.

Which of the Following Provides an Accurate Description Regarding the Slope