The upward sloping segment of the aggregate supply curve is where:Question 35Select one:a.substantial growth of real GDP can be produced without any increase in the price level (inflation).b.increased price levels result in a corresponding increased real output in the economy.c.price levels (inflation) can rise without increases in real output in the economy.d.is when all available labor resources are being used in the most efficient way possible.e.no growth of real GDP can be produced even with increases in the price levels.
Question
The upward sloping segment of the aggregate supply curve is where:Question 35Select one:a.substantial growth of real GDP can be produced without any increase in the price level (inflation).b.increased price levels result in a corresponding increased real output in the economy.c.price levels (inflation) can rise without increases in real output in the economy.d.is when all available labor resources are being used in the most efficient way possible.e.no growth of real GDP can be produced even with increases in the price levels.
Solution
The correct answer is b. increased price levels result in a corresponding increased real output in the economy.
This is because the upward sloping segment of the aggregate supply curve represents a period in the economy where there are idle resources. As the price level increases, producers are incentivized to produce more, leading to an increase in real output. This is due to the fact that higher prices mean higher profits for businesses, which encourages them to increase production. This results in a higher real GDP.
Similar Questions
Which of the following is not true when the economy is on the vertical segment of the aggregate supply curve?Question 45Select one:a.all available labor resources are being used in the most efficient way possible.b.price levels (inflation) can rise without increases in real output in the economy.c.prices will increase without increases in the output level because the economy is producing at full capacity.d.substantial growth of real GDP can be produced without any increase in the price level (inflation).e.the economy is at full employment.
Along the horizontal range of the aggregate supply curve, an increase in the aggregate demand curve will increase:Group of answer choicesboth the price level and real GDP.only real GDP.only the price level.real GDP and reduce the price level.
which of the following is true about the long-run aggregate supply curve?it is vertical at the level of potential gdpit does not shift in response to temporary changes in aggregate demandit shows the relationship between the price level and real gdp when wages and other costs are at an equilibrium level.all the above
If long run aggregate supply curve decreases, real gross domestic product (GDP) and the price level will change in which of the following ways?Elimination Tool
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