The slope of the aggregate supply curve shows that,all else the same,the
A)quantity of real GDP supplied increases as the price level increases.
B)quantity of real GDP supplied decreases as the price level increases.
C)quantity of real GDP supplied remains constant as the price level increases.
D)price level remains constant as real GDP increases.
E)price level remains constant as potential GDP increases.

Question

Quizplus · Accepted Answer

The slope of the aggregate supply curve is positive, which means that as the price level increases, the quantity of real GDP supplied also increases. This is because firms are willing to produce more output at higher prices, as they can earn higher profits. Similarly, as the price level decreases, the quantity of real GDP supplied decreases as well. Therefore, choice A is the correct answer.

The Slope of the Aggregate Supply Curve Shows That,all Else