The aggregate supply curve
A) is irrelevant for determining macroeconomic equilibrium.
B) shows the various amounts of real output that the economy will produce of a particular good.
C) has a negative slope.
D) shifts with changes in consumer spending, investment, government spending, and net exports.
E) relates total output of the economy at alternative price levels.

Question

Quizplus · Accepted Answer

The aggregate supply curve shows the total output of the economy at different price levels. As the price level increases, suppliers are willing to produce more output to meet the higher demand for their goods and services. Conversely, as the price level decreases, suppliers may reduce production levels. The aggregate supply curve is not irrelevant but crucial for determining macroeconomic equilibrium. It is affected by changes in consumer spending, investment, government spending, and net exports, which can shift the aggregate supply curve.

The Aggregate Supply Curve