The aggregate supply curve shows the relationship between the:
A) overall price level in the economy and total production by firms.
B) unemployment rate and total production by firms.
C) overall price level in the economy and the unemployment rate.
D) inflation rate and the overall price level in the economy.

Question

Quizplus · Accepted Answer

The aggregate supply curve represents the total production by firms in an economy at different price levels. It shows the relationship between the overall price level in the economy and the total output produced by firms. The curve slopes upward because as prices rise, firms are willing to produce more output to meet the increased demand, and as prices fall, firms are willing to produce less output. Therefore, choice A is the correct answer.

The Aggregate Supply Curve Shows the Relationship Between The