Which of the Following Is True of the Short-Run Aggregate

question 3

Multiple Choice

Which of the following is true of the short-run aggregate supply curve?

• A)It shows the relation between the inflation rate and the quantity of aggregate output firms supply,other things constant.
• B)It shows the relation between the price of labor and the aggregate quantity of labor workers supply,other things constant.
• C)It shows the relation between the interest rate and the quantity of capital goods firms supply,other things constant.
• D)It shows the relation between the price level and the quantity of aggregate output firms supply,other things constant.
• E)It displays an inverse relationship between the price level and real GDP.

---

Definitions:

Short-run Economy

The period in which the quantities of at least one input, such as capital, is fixed and firms adjust only labor inputs to change output levels.

Money Supply Growth Rate

The speed at which available monetary resources in an economy grow over a determined time frame.

Short-run Phillips Curve

A graphical representation indicating an inverse relationship between the rate of inflation and the rate of unemployment in the short term.

Inflation

The measure of how quickly the general price level for products and services grows, resulting in reduced consumer purchasing ability.