In the aggregate supply relation,the current price level depends upon
A)expected price level.
B)monetary policy.
C)fiscal policy.
D)consumer confidence.
E)all of the above

Question

Quizplus · Accepted Answer

In the aggregate supply relation, the current price level depends upon the expected price level, which is the anticipated level of prices that households and firms expect to prevail in the economy. The expectations of price changes influence the decisions of consumers and firms, such as their willingness to spend, invest, or produce, which impacts the overall level of economic activity and the equilibrium price level. Monetary and fiscal policies and consumer confidence can influence the expected price level, but they do not determine the current price level directly.

In the Aggregate Supply Relation,the Current Price Level Depends Upon