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

question 107

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

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