How would supply affect the aggregate output of an economy?
A) Supply would decrease aggregate output
B) Increases in both would cause inflation
C) Aggregate output would grow as supply grows
D) Supply would have no direct effect on aggregate output
E) Aggregate output would increase the money supply

Question

Quizplus · Accepted Answer

As supply grows, firms are able to produce more goods and services, which leads to an increase in aggregate output. This is because there are more goods and services available for consumers to purchase, which leads to increased spending and economic activity. Therefore, supply has a positive effect on aggregate output.

How Would Supply Affect the Aggregate Output of an Economy