Question

The​ short-run aggregate supply curve shows the​ short-run relationship between the

A.

price level and quantity supplied in one market.

B.

price level and total demand in the entire economy.

C.

price level and the willingness of firms to supply output to the economy.

D.

consumption level and the price level.

Evidence about the behavior of prices in the economy suggests that changes in aggregate demand have a relatively （Large or small） effect on prices within a few quarters so that the​ short-run aggregate supply curve is relatively （flat or steep） ​Thus, shifts in aggregate demand lead to a （large or small） changes in​ output, （large or small） changes in price.

Answer 1

Meaning of Aggregate supply is desired, intended or planned supply of goods by the producers. It is the total amount of goods and services they would like to sell.

The definition clearly gives us the answer.

Correct option will be C. price level and the willingness of firms to supply output to the economy.