The aggregate supply curve shows how much the nation's businesses are willing and able to produce at each price level.

Question

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The aggregate supply curve shows the relationship between the price level and the quantity of goods and services that businesses are willing and able to produce. This relationship is based on factors such as technology, labor and capital resources, and production costs. As price levels rise, the incentive for businesses to increase production also rises, resulting in a positive relationship between price level and quantity supplied. The aggregate supply curve is upward sloping.

The Aggregate Supply Curve Shows How Much the Nation's Businesses