The short-run aggregate supply curve:
A)is positively sloped.
B)is negatively sloped.
C)is a vertical line parallel to the price level axis.
D)is a horizontal line parallel to the output axis.
E)is a ray from the origin with slope exactly equal to 1.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve is positively sloped because, in the short run, as prices increase, the quantity of goods and services firms are willing to supply also increases. This is due to factors like menu costs, wage stickiness, and misperceptions about relative prices.

The Short-Run Aggregate Supply Curve