Question

Aggregate supply (AS) denotes the relationship between the __________________ that firms choose to produce and sell and the _________________, holding the price of inputs fixed.
a. total quantity; price level for output
b. type of goods; input price of raw materials
c. price of goods; number of employees
d. total inputs; types of goods

Answer 1

Answer:

a. total quantity; price level for output

Explanation:

The aggregate supply curve defines the relationship between various price levels and the quantities of output that producers are prepared to supply in the market. Aggregate supply is also the total output. It can be described as the total supply of goods and services produced in a country at various in a given period.

The aggregate supply curve slopes upwards. An increase in consumer prices indicates that firms should produce more to meet the rising demand.  In the short run, an increase or decrease in demand causes changes in the aggregate supply. Technological change and other economic indicators impact aggregate supply in the long-term.