The short-run aggregate supply function plots
A)planned expenditures against the price level.
B)total employment against the price level.
C)planned production against the price level.
D)real GDP against planned production.

Question

Quizplus · Accepted Answer

The short-run aggregate supply function plots planned production against the price level. This means that as prices increase, firms are willing to produce more output in the short run due to the profit incentive. It is important to note that the short-run aggregate supply curve is upward sloping, which reflects the positive relationship between the price level and planned production or output.

The Short-Run Aggregate Supply Function Plots