The aggregate supply curve shows the relation between
A)the real interest rate and the aggregate amount of output that firms supply.
B)the price level and the aggregate amount of output that firms supply.
C)the supply of goods by firms and the price of goods relative to the price of nonmonetary assets.
D)the inflation rate and the unemployment rate.

Question

Quizplus · Accepted Answer

The aggregate supply curve shows the relationship between the price level and the aggregate amount of output that firms are willing and able to supply. As the price level increases, firms are typically willing to produce more output, resulting in an upward sloping aggregate supply curve. The real interest rate, the supply of goods by firms, and the inflation rate and unemployment rate may all have an impact on aggregate supply, but they are not the primary factors represented on the aggregate supply curve.

The Aggregate Supply Curve Shows the Relation Between