The economy's aggregate supply (AS)curve shows the relationship between the
A)equilibrium real GDP and marginal cost.
B)equilibrium real GDP and desired consumption.
C)price level and the marginal propensity to consume (MPC).
D)price level and the total output that firms wish to produce and sell,with technology and input prices held constant.
E)price level and the total output that firms wish to produce and sell,as technology and input prices vary.

Question

Quizplus · Accepted Answer

The aggregate supply curve shows the relationship between the price level and the total output that firms wish to produce and sell, holding technology and input prices constant. This is because changes in technology or input prices would shift the AS curve. The equilibrium real GDP is determined by the intersection of the AS and aggregate demand curves.

The Economy's Aggregate Supply (AS)curve Shows the Relationship Between the