The shape of the short-run aggregate supply curve indicates that as the general price level rises,
output will expand but not by much when the economy reaches full employment.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve is upward sloping, indicating that as the general price level rises, output will expand. However, as the economy approaches full employment, the curve becomes steeper, reflecting that output increases by smaller amounts due to capacity constraints.

The Shape of the Short-Run Aggregate Supply Curve Indicates That