The economy's aggregate supply curve is drawn under two main assumptions.They are
A)firms' unit costs are constant; prices of all factors of production are constant.
B)firms' unit costs are constant; the state of technology is constant.
C)firms will produce more output only if prices rise; technology improves only if prices rise.
D)the prices of all factors of production are constant; the state of technology is constant.
E)the prices of all factors of production are constant; productivity improves as the price level rises.

Question

Quizplus · Accepted Answer

The aggregate supply curve is drawn under the assumption that the prices of all factors of production are constant and the state of technology is constant. This simplifies the analysis by focusing on the relationship between the overall price level and the total output produced in the economy, without the need to account for changes in input costs or technological advancements.

The Economy's Aggregate Supply Curve Is Drawn Under Two Main