The short-run aggregate supply curve shows the relationship between
A) the general level of prices and the quantity of goods and services purchased by all consumers in the economy.
B) the general level of prices and the quantity of goods and services that domestic firms will supply.
C) the interest rate and the quantity of goods and services that domestic firms will supply.
D) the money supply and the quantity of goods and services that domestic firms will supply.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve shows the relationship between the general level of prices and the quantity of goods and services that domestic firms will supply. This means that as the level of prices increase, firms will be willing to supply more goods and services in the short-run. This relationship is influenced by factors such as input costs and technology, as well as changes in demand. Therefore, the short-run aggregate supply curve is upward sloping.

The Short-Run Aggregate Supply Curve Shows the Relationship Between