The short-run aggregate supply curve has a(n)________ slope because as prices of ________ rise, prices of ________ rise more slowly.
A)positive; final goods and services; inputs
B)infinite; final goods and services; inputs
C)positive; inputs; final goods and services
D)infinite; inputs; final goods and services
E)zero; final goods; inputs

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve has a positive slope because, in the short run, as the prices of final goods and services rise, the prices of inputs (like labor and raw materials) tend to rise more slowly. This difference in how quickly prices adjust allows firms to increase production in response to higher prices for the goods and services they sell, reflecting the positive relationship between the price level and the quantity of output supplied in the short run.

The Short-Run Aggregate Supply Curve Has A(n)________ Slope Because as Prices