The upward-sloping aggregate supply curve represents
A) increases in national output that are accompanied by decreases in the average price level.
B) increases in national output but a fixed price level.
C) increases in the average price level but fixed national output.
D) increases in national output that are accompanied by increases in the average price level.
E) fixed national output and a fixed price level.

Question

Quizplus · Accepted Answer

The upward-sloping aggregate supply curve represents increases in national output that are accompanied by increases in the average price level. This is because as output increases, there is a greater demand for inputs such as labor and materials, which drives up their prices, leading to an increase in the overall price level.

The Upward-Sloping Aggregate Supply Curve Represents