The upward sloping aggregate supply curve for the country of Betania:
A) is valid for the long run but not for the short run.
B) shows a positive relationship between aggregate production and the general price level.
C) shows a negative relationship between aggregate production and the general price level.
D) is horizontal if the economy is at full employment.

Question

Quizplus · Accepted Answer

The upward sloping aggregate supply curve indicates a positive relationship between aggregate production and the general price level, suggesting that as prices increase, the quantity of goods and services supplied also increases. This is a fundamental concept in macroeconomics, reflecting producers' responsiveness to price changes in the short run.

The Upward Sloping Aggregate Supply Curve for the Country of Betania