The short-run aggregate supply curve has a(n)________ slope because as prices of ________ rise,prices of ________ rise more slowly.
A)positive; final goods and services; inputs
B)infinite; final goods and services; inputs
C)positive; inputs; final goods and services
D)infinite; inputs; final goods and services

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve has a positive slope because, in the short run, as the prices of final goods and services rise, the prices of inputs (like labor and raw materials) tend to rise more slowly. This is due to various factors including contracts and agreements that fix input prices for certain periods, making them less responsive to changes in demand compared to the prices of final goods and services.

The Short-Run Aggregate Supply Curve Has A(n)________ Slope Because as Prices