-In the above figure, the short- run aggregate supply curve is SAS₁. Suppose that the price level in the economy increases. As a result there is A)a downward movement along SAS₁. B)a shift to SAS₀. C)a shift to SAS₂. D)an upward movement along SAS₁.

Question

Quizplus · Accepted Answer

An increase in the price level results in an upward movement along the existing short-run aggregate supply curve, SAS₁, rather than a shift of the curve itself.

-In the Above Figure, the Short- Run Aggregate Supply Curve