A Keynesian short-run aggregate supply curve has a flatter portion and a steep portion. How does an increase in aggregate demand affect the price level differently across these two portions?

a. There is a sharp increase in the price level across the flatter portion and a small increase in the price level across the steep portion.
b. There is a sharp decrease in the price level across the flatter portion and a small decrease in the price level across the steep portion.
c. There is a small increase in the price level across the flatter portion and a sharp increase in the price level across the steep portion.
d. There is a small decrease in the price level across the flatter portion and a sharp increase in the price level across the steep portion.

c. There is a small increase in the price level across the flatter portion and a sharp increase in the price level across the steep portion.

Economics

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