One Explanation for an Upward-Sloping Short-Run Aggregate Supply Curve Is

question 57

Multiple Choice

One explanation for an upward-sloping short-run aggregate supply curve is the misperception effect, which is based on:

• A)producers' tendency of increasing supply when they observe falling profit margins with increasing price level.
• B)producers' tendency of increasing supply when they observe rising costs of production with decreasing price level.
• C)producers' tendency of increasing supply when they observe fixed wage labor contracts.
• D)producers' tendency of increasing supply when they observe a rise in prices.
• E)producers' tendency of increasing supply when they observe a fall in prices.

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