The Short-Run Aggregate Supply Curve Is Upsloping Because Higher Price

question 256

Multiple Choice

The short-run aggregate supply curve is upsloping because higher price levels

• A) lower interest rates and encourage firms to invest and produce more.
• B) create incentives to expand output when resource prices are unresponsive to price-level changes.
• C) encourage importation of foreign goods.
• D) create an expectation among producers of still higher price levels.

---

Definitions:

Level of Satisfaction

The degree to which needs, desires, or expectations are fulfilled or gratified.

Marginal Utility

The change in satisfaction or utility received by consuming one additional unit of a good or service.

Limited Usefulness

Refers to the notion that a tool, resource, or piece of information is only beneficial or applicable in certain situations or to a certain extent.

Optimal Quantity

The amount of a good or service that maximizes the net benefit to an individual or society, often considering factors like cost and utility.