Which of the following statements is true?
A)The short-run aggregate supply curve is generally upward sloping.
B)The short-run aggregate supply curve is generally downward sloping.
C)The short-run aggregate supply curve is vertical.
D)The long-run aggregate supply curve is horizontal.
E)The long-run aggregate supply curve is generally downward sloping.

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve is generally upward sloping, meaning that as the price level increases, firms are willing to supply more output due to the increased profits they earn from higher prices. However, in the long run, wages and resource prices will adjust to changes in the price level, causing the long-run aggregate supply curve to be vertical at the potential output level.

Which of the Following Statements Is True