The short-run aggregate supply curve shows the
A) inverse relationship between the price level and real GDP purchased.
B) inverse relationship between the price level and real GDP produced.
C) direct relationship between the price level and real GDP produced.
D) direct relationship between the price level and real GDP purchased.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve illustrates a direct relationship between the price level and the quantity of goods and services that firms are willing to produce. As prices increase, firms are typically willing to produce and supply more, reflecting an expansion in production due to the higher profitability of selling goods and services at higher prices.

The Short-Run Aggregate Supply Curve Shows the