The Short-Run Aggregate Supply Curve (SRAS) Slopes Upward to the Right

question 117

Multiple Choice

The short-run aggregate supply curve (SRAS) slopes upward to the right because unexpected increases in prices will

• A) increase aggregate demand as consumers buy more.
• B) decrease aggregate demand as consumers buy less.
• C) cause firms to expand output since the higher product prices will improve profitability.
• D) cause firms to reduce output since the higher product prices will decrease profit margins.

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