Which of the Following Is an Explanation of Why the Aggregate

question 129

Multiple Choice

Which of the following is an explanation of why the aggregate supply curve slopes upward,assuming the price level increases?

• A) The purchasing power of money decreases and businesses buy fewer goods
• B) The costs of production increase in the short run and profits become smaller
• C) Production costs increase and producers charge higher prices for their goods
• D) The demand for loans decreases so interest rates decline and businesses borrow more money

---

Definitions:

Social Entities

Groups, organizations, or institutions composed of individuals that interact in complex ways and have a collective goal or identity.

Physical Capital

Tangible assets of a business that are used in the production process, such as machinery, buildings, and equipment.

Social Inventions

Innovations in the social realm that change or influence the way societies operate, interact, or govern themselves.

Physical Assets

Tangible resources or possessions that have value and are owned by an individual or organization, such as buildings, machinery, or land.