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Explain the effect on output and price level from an increase in the short-run aggregate-supply curve.

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Answer:

The price will fall and quantity will increase.

Step-by-step explanation:

The short-run aggregate supply curve is an upward sloping curve showing a positive relationship between price and output.

In case of increase in short-run supply, the short-run aggregate supply curve will shift rightwards. This will cause the price level to fall. The output level will increase as well.

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