The Positive Relationship Between Short- Run Aggregate Supply and the Price

question 307

Multiple Choice

The positive relationship between short- run aggregate supply and the price level indicates that, in the short run,

• A) firms produce more output as the price level falls.
• B) the money wage rate increases when moving along the short- run aggregate supply curve.
• C) lower price levels are more profitable for firms.
• D) firms produce more output as the price level rises.

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