Module 28 Aggregate supply

Which is TRUE with respect to the short-run aggregate supply and the long-run aggregate supply?

The economy can be on both curves simultaneously.

The aggregate supply curve shows the relationship between the aggregate price level and:

aggregate output supplied

According to the short-run aggregate supply curve, when the _________ rises, the quantity of _________ rises.

aggregate price level; aggregate output supplied

The long-run aggregate supply curve is vertical because in the long run:

all prices are flexible.

A rise in labor productivity will most likely result in a(n):

increase in short-run aggregate supply.

In the long run, the aggregate price level has:

no effect on the quantity of aggregate output.

An upward-sloping short-run aggregate supply curve indicates that increases in:

the overall price level will increase the amount of aggregate output supplied by firms.

The short-run aggregate supply curve slopes upward because of:

wage and price stickiness.