Exhibit 22-2 In Exhibit 22-2,which curve represents short-run aggregate supply?
A) A
B) B
C) C
D) none of the above

Question

Exhibit 22-2  In Exhibit 22-2,which curve represents short-run aggregate supply?
A) A 
B) B 
C) C 
D) none of the above

Quizplus · Accepted Answer

Curve B represents short-run aggregate supply because it is upward sloping, indicating that a higher price level leads to a higher level of output in the short run due to firms being able to increase production by utilizing existing resources and labor. Curve A represents long-run aggregate supply, which is vertical because it shows the maximum potential output that can be produced with full employment of resources in the economy. Curve C represents aggregate demand, showing the relationship between the price level and the level of real output demanded by consumers, firms, and the government.

Exhibit 22-2 in Exhibit 22-2,which Curve Represents Short-Run Aggregate