In reference to the aggregate supply curve, what would an increase in the price level cause?
A) an increase in the quantity of aggregate output supplied
B) a decrease in the quantity of aggregate output supplied
C) a leftward shift of the aggregate supply curve
D) a rightward shift of the aggregate supply curve

Question

In reference to the aggregate supply curve, what would an increase in the price level cause?  
A) an increase in the quantity of aggregate output supplied 
B) a decrease in the quantity of aggregate output supplied 
C) a leftward shift of the aggregate supply curve 
D) a rightward shift of the aggregate supply curve

Quizplus · Accepted Answer

An increase in the price level leads to an increase in the quantity of aggregate output supplied, moving along the aggregate supply curve to a higher quantity. This is because higher prices can make production more profitable, encouraging firms to increase output.

In Reference to the Aggregate Supply Curve, What Would an Increase