The aggregate supply curve is drawn with
A)the price level on the vertical axis and nominal GDP on the horizontal.
B)nominal GDP on the vertical axis and real GDP on the horizontal.
C)the price level on the vertical axis and real GDP on the horizontal.
D)real GDP on the horizontal and the rate of inflation on the vertical.

Question

Quizplus · Accepted Answer

The aggregate supply curve represents the total supply of goods and services produced by all firms in the economy at different price levels. Therefore, it is drawn with the price level on the vertical axis and real GDP (output) on the horizontal axis. This helps to show the relationship between the price level and the quantity of goods and services that firms are willing and able to supply at different levels of output. The other options do not accurately represent the aggregate supply curve.

The Aggregate Supply Curve Is Drawn with