A curve that shows the price level at which firms in the economy are willing to produce different levels of goods and services and the resulting level of real income is called:
A)aggregate demand.
B)aggregate supply.
C)potential output.
D)natural rate of unemployment.

Question

Quizplus · Accepted Answer

The curve described in the question is the aggregate supply curve, which shows the relationship between the price level and the quantity of output that firms are willing to produce. The curve usually slopes upwards, indicating that firms are willing to produce more output at higher price levels due to higher profit margins, but there may also be factors that limit the amount of output that can be produced, such as scarce resources or technological constraints. The aggregate demand curve, on the other hand, shows the relationship between the price level and the quantity of output that consumers are willing to purchase, and usually slopes downwards due to the negative relationship between price and quantity demanded. Potential output refers to the level of output that can be produced when all resources are fully employed, while the natural rate of unemployment refers to the level of unemployment that exists when the economy is operating at potential output.

A Curve That Shows the Price Level at Which Firms