Which is a determinant of aggregate supply?
A) interest rates
B) productivity
C) prices of substitutes
D) household expectations

Question

Quizplus · Accepted Answer

Productivity is a major determinant of aggregate supply as it affects the ability of firms to produce goods and services efficiently. Higher levels of productivity can lead to an increase in the quantity of output supplied at any given price level, while lower levels of productivity can reduce the quantity of output supplied. Interest rates (A) affect borrowing and investment decisions but do not directly impact the ability of firms to produce output. Prices of substitutes (C) and household expectations (D) can affect demand but do not directly impact aggregate supply.

Which Is a Determinant of Aggregate Supply