If the amount of output firms are willing to produce at each possible price level increases, that’s:Multiple choice question.neither a shift of the aggregate supply nor a movement along the aggregate supply.a shift of the aggregate supply.a movement along the aggregate supply.both a shift of the aggregate supply and a movement along the aggregate supply.
Question
If the amount of output firms are willing to produce at each possible price level increases, that’s:Multiple choice question.neither a shift of the aggregate supply nor a movement along the aggregate supply.a shift of the aggregate supply.a movement along the aggregate supply.both a shift of the aggregate supply and a movement along the aggregate supply.
Solution
The correct answer is: a shift of the aggregate supply.
Here's why:
The aggregate supply curve shows the total quantity of output—i.e., real GDP—that firms will produce and sell at each price level. The curve is upward sloping because as the price level increases, firms are willing to produce more goods and services.
If the amount of output firms are willing to produce at each possible price level increases, this means that at every given price level, firms are now willing to produce more. This is not a movement along the aggregate supply curve (which would imply a change in the price level), but a shift of the aggregate supply curve to the right.
In other words, for the same price levels, firms are now willing to produce more output. This increase in production could be due to various factors such as technological advancements, increase in resources, etc.
So, the correct answer is: a shift of the aggregate supply.
Similar Questions
If consumption or gross investment increase for any reason other than the price level, that’s:Multiple choice question.neither a shift of the aggregate demand nor a movement along the aggregate demand.both a shift of the aggregate demand and a movement along the aggregate demand.a shift of the aggregate demand.a movement along the aggregate demand.
A movement along the supply curve is the result of a change in _______ , while a shift in the supply curve is the result of a change in ________.Multiple choice question.price; non-price determinantsnon-price determinants; pricedemand; priceprice; demand.
Assume the economy is initially operating at the natural level of output. Which of the following events will initially cause a shift of the aggregate supply curve?Question 5Select one:a.an increase in the price targetb.an increase in government spendingc.a decrease in the money supplyd.an increase in taxese.None of the above.
Which type of movement would lead to an increase in quantity and an increase in price?A.Quantity demanded increaseB.Supply decreaseC.Demand decreaseD.No changeE.Quantity supplied increase
The aggregate supply curve will shift up when which of the following occurs?Question 20Select one:a.an increase in the expected price levelb.a decrease in unemployment benefitsc.a decrease in firm's markup over labour costsd.All of the above.e.None of the above.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.