The dynamic aggregate supply curve shows the short-run relation between:
A) the natural rate of output and inflation
B) the natural rate of output and expected rate of inflation
C) output and inflation
D) output and the natural rate of interest

Question

Quizplus · Accepted Answer

The dynamic aggregate supply curve shows the short-run relation between output and inflation. This curve takes into account the adjustment process of firms in response to changes in demand and input prices, so it is different from the static aggregate supply curve that assumes all prices are fixed.

The Dynamic Aggregate Supply Curve Shows the Short-Run Relation Between