The slope of the SP curve depends on
A) how business changes its markups when output varies.
B) whether the expansionary force in the economy is coming through monetary policy or fiscal policy.
C) the percentage of GDP that is sold on auction markets.
D) Both A and C.

Question

Quizplus · Accepted Answer

The slope of the SP curve is determined by two factors: how business changes its markups when output varies (option A) and the percentage of GDP that is sold on auction markets (option C). Therefore, the best choice is D, which includes both A and C. Option B is incorrect because the expansionary force in the economy does not directly affect the slope of the SP curve.

The Slope of the SP Curve Depends on