As the ________ decreases,the short-run aggregate supply curve begins to level out.
A)inflation rate
B)price level
C)unemployment rate
D)labour force participation rate

Question

Quizplus · Accepted Answer

As the price level decreases, firms become less willing to produce output at the same levels as before because they face lower revenues due to reduced prices. This causes the short-run aggregate supply curve to level out as firms are not willing to produce as much output at lower prices.

As the ________ Decreases,the Short-Run Aggregate Supply Curve Begins to Level