The positive relationship between the ________ function and the price level suggests that,in the short run,firms produce more output as the price levels rises.
A)long-run aggregate supply
B)short-run aggregate supply
C)aggregate demand
D)investment demand

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve shows the relationship between the price level and the quantity of goods and services that firms are willing to supply in the short run. This relationship is positive, meaning that as the price level rises, firms are willing to produce more output in order to take advantage of the higher prices. Therefore, the correct answer is B) short-run aggregate supply.

The Positive Relationship Between the ________ Function and the Price