Question

"The aggregate supply curve shows": Question 3 options: a) the nominal GDP that consumers are willing purchase at varying price levels. b) the nominal GDP that firms will produce at varying price levels. c) the real GDP that firms will produce at varying price levels. d) the real GDP that consumers are willing to purchase at varying price levels.

Answer 1

Answer:

C

Explanation:

The aggregate supply curve shows the real GDP that firms will produce at varying price level. Because aggregate supply curve is used for supply purposes not for the quantity demanded. Therefore, option A and D are invalid.

Nominal GDP is when, increase of goods are caused by the value of inflation not by having more products. While real GDP is when there is a real output increased by domestic firms in a certain period.