-In the above figure, the short-run aggregate supply curve is SAS1. Suppose that the price level in the economy increases. As a result there is
A) an upward movement along SAS1.
B) a downward movement along SAS1.
C) a shift to SAS0.
D) a shift to SAS2.

Question

-In the above figure, the short-run aggregate supply curve is SAS1. Suppose that the price level in the economy increases. As a result there is
A) an upward movement along SAS1. 
B) a downward movement along SAS1. 
C) a shift to SAS0. 
D) a shift to SAS2.

Quizplus · Accepted Answer

An increase in the price level in the economy results in an upward movement along the short-run aggregate supply curve (SAS1), as producers are willing to supply more goods and services at higher prices. This is represented by moving up along the same curve, not by shifting the curve itself.

-In the Above Figure, the Short-Run Aggregate Supply Curve Is