The short-run aggregate supply curve is:
A) upward sloping.
B) vertical.
C) horizontal.
D) downward sloping.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve is upward sloping because as the price level increases, firms are able to increase production and supply more goods and services in the short run. However, eventually, as factors of production become more scarce and costly, the curve will shift leftward and become upward sloping in the long run.

The Short-Run Aggregate Supply Curve Is