Along the aggregate supply curve
A)the horizontal part represents a situation where the economy is operating above full employment levels.
B)inflation would be a primary concern along the horizontal part of the aggregate supply curve.
C)idle resources,such as labor and capital,would be a feature of the vertical section of the aggregate supply curve.
D)the horizontal section of the aggregate supply curve represents the limit of production.
E)the middle,upward-sloping part of the aggregate supply curve would be associated with a growing economy that experienced increased prices from resources that are becoming relatively scarce.

Question

Quizplus · Accepted Answer

The middle, upward-sloping part of the aggregate supply curve represents a situation where the economy is growing, but resources are becoming relatively scarce, leading to increased prices. The horizontal part of the aggregate supply curve represents a situation where the economy is operating above full employment levels, leading to inflation as idle resources become scarce. The vertical section of the aggregate supply curve represents a situation where all resources are fully utilized, and additional production can only be achieved through technological improvements or an increase in the quantity of resources.

Along the Aggregate Supply Curve