Which of the following is true of the aggregate supply curve?
A)It portrays an inverse relationship between the price level and quantity of aggregate output.
B)Resource utilization is constant along the curve.
C)A decrease in the price level encourages firms to expand production because the cost of production decreases.
D)The curve is upward-sloping.
E)As average prices in the United States rise relative to average prices in other countries,U.S.producers find export markets more attractive than domestic markets.

Question

Quizplus · Accepted Answer

The aggregate supply curve is generally upward-sloping, which means that as the price level increases, firms are willing to supply more output. This is because higher prices increase the profitability of production, and firms are incentivized to increase production to capture the higher profits. The other options are not true of the aggregate supply curve.

Which of the Following Is True of the Aggregate Supply