As real GDP per year increases along the short-run aggregate supply (SRAS) curve, the SRAS curve
A) becomes increasingly steep.
B) begins to level out.
C) shifts inward.
D) does not change.

Question

Quizplus · Accepted Answer

The SRAS curve becomes increasingly steep as real GDP per year increases because it reflects that as the economy approaches full capacity, additional increases in output become more difficult and costly to achieve, leading to steeper increases in the price level for further increases in real GDP.

As Real GDP Per Year Increases Along the Short-Run Aggregate