According to the short-run aggregate supply curve, when the _____ rises, the quantity of aggregate output _____ rises.
A) profit per unit; demanded
B) aggregate price level; supplied
C) aggregate price level; demanded
D) interest rate; supplied

Question

Quizplus · Accepted Answer

According to the short-run aggregate supply curve, when the aggregate price level rises, the quantity of aggregate output supplied rises. This is because firms are willing to supply more output at higher prices due to the potential for increased profits.

According to the Short-Run Aggregate Supply Curve, When the _____