For a given increase in aggregate demand,the steeper the short-run aggregate supply curve:
A)the larger the increase in investment expenditure.
B)the smaller the increase in the price level.
C)the smaller the increase in real GDP.
D)the larger the increase in real GDP.
E)the smaller the increase in real interest rate.

Question

Quizplus · Accepted Answer

The steeper the short-run aggregate supply curve, the less responsive it is to changes in aggregate demand. Therefore, for a given increase in aggregate demand, the increase in real GDP will be smaller.

For a Given Increase in Aggregate Demand,the Steeper the Short-Run