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

question 293

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

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