The short-run aggregate supply curve:
A)has the same slope as the long-run aggregate supply curve.
B)shifts only when the long-run aggregate supply curve shifts in the same direction.
C)normally slopes upward to the right because the costs of labor and other inputs are relatively fixed in the short run.
D)normally has a slope of zero, meaning the curve is horizontal.
E)is normally perpendicular to the horizontal axis.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve normally slopes upward to the right because the costs of labor and other inputs are relatively fixed in the short run. This means that as output increases, the costs of inputs, such as wages, do not increase proportionally, leading to lower production costs and higher profits for firms.

The Short-Run Aggregate Supply Curve