In the short run, a rise in the overall price level generally causes real output supplied to
Correct answer: A. Increase along an upward-sloping aggregate supply curve
- A. Increase along an upward-sloping aggregate supply curve
- B. Decrease along a downward-sloping aggregate supply curve
- C. Remain fixed at zero because prices are flexible
- D. Increase only when the money supply falls
Explanation
In the short run, some wages and input costs adjust slowly, so firms may supply more output when the price level rises. This gives the short-run aggregate supply curve a positive slope.
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