The aggregate supply curve shows the relationship between
A)the level of inputs and aggregate output.
B)the price level and the level of inputs.
C)the wage rate and the level of employment.
D)the price level and the level of aggregate output supplied.

Question

Quizplus · Accepted Answer

The aggregate supply curve shows the relationship between the price level and the level of aggregate output supplied. As the price level increases, businesses are willing to produce more output to meet the increased demand for their goods and services, resulting in a higher level of aggregate output supplied. Conversely, as the price level decreases, businesses are willing to produce less output since the demand for their goods and services is lower, resulting in a lower level of aggregate output supplied.

The Aggregate Supply Curve Shows the Relationship Between