The short-run aggregate supply curve
A) becomes ﬂatter at output levels above the full-employment output.
B) becomes steep at output levels above the full-employment output.
C) is upward-sloping with a constant slope.
D) is horizontal.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve becomes steep at output levels above the full-employment output because it becomes increasingly difficult to increase output as the economy approaches its capacity, leading to higher prices rather than higher output.

The Short-Run Aggregate Supply Curve