The steepness of the aggregate supply curve depends on the:
A)rate of inflation in the economy.
B)change in relative prices of commodities.
C)substitutability of the inputs used in producing various goods and services.
D)ability of the producers to respond to price-level changes in the short run.
E)the market rate of interest.

Question

Quizplus · Accepted Answer

The steepness of the aggregate supply curve depends on the ability of producers to respond to price-level changes in the short run. If producers can easily adjust their output levels in response to price changes, then the supply curve will be relatively flat. If producers are unable to adjust their output levels quickly, then the supply curve will be steeper.

The Steepness of the Aggregate Supply Curve Depends on The