The ________ between the short-run aggregate supply function and the price level suggests that,in the short run,firms produce more output as the price levels rises.
A)negative relationship
B)positive relationship
C)inverse relationship
D)demand relationship

Question

Quizplus · Accepted Answer

A positive relationship between the price level and short-run aggregate supply function means that firms are willing to produce more output at higher price levels, which is consistent with the law of supply. As the price level increases, firms receive a higher price for their output, making it more profitable to produce and sell more.

The ________ Between the Short-Run Aggregate Supply Function and the Price