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

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve has a positive slope because it reflects the period in which the prices of final goods and services can rise while the prices of inputs (like wages and raw materials) adjust more slowly due to contracts and other factors. This means that in the short run, a higher price level for outputs leads to higher production because the cost of production rises more slowly than the selling price, making production more profitable.

The ________ Curve Has a Positive Slope Because as Prices