Explain why the short-run aggregate supply curve is a relatively flat, horizontal line
What will be an ideal response?
In the short run, prices are sticky and output is determined primarily by demand. Firms will adjust production to meet demand. Since firms will supply all the output to meet demand with only small changes in price, the short-run aggregate supply curve is relatively flat.
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In the US, an increase in which of the following will cause an increase in US imports?
I. Per capita real income II. Price Level III. Real interest rates IV. Tariffs a. I and II only b. I and III only c. I and IV only d. I, II, and III only e. II, III, and IV only
An improvement in the quality of U.S. goods would lead to a ________ in the demand for dollars and a ________ in the exchange rate
A) rise; rise B) rise; fall C) fall; rise D) fall; fall