The upward slope of the aggregate-supply curve in the short run shows that:
A)a fall in the price level raises the overall quantity of goods and services supplied
B)an increase in the price level increases the overall quantity of goods and services demanded
C)a fall in the price level has no effect on the overall quantity of goods and services supplied
D)a fall in the price level reduces the overall quantity of goods and services supplied

Question

Quizplus · Accepted Answer

The upward slope of the short-run aggregate-supply curve indicates that a fall in the price level reduces the overall quantity of goods and services supplied. This is because, in the short run, some prices and wages are sticky and do not adjust immediately to changes in economic conditions, leading firms to produce less as the price level falls.

The Upward Slope of the Aggregate-Supply Curve in the Short