Final answer:
The short-run aggregate supply (SRAS) curve slopes upward because firms have an incentive to increase production for higher profits when the price level for outputs rises and input costs remain fixed. Wages and resource prices adjust slowly to price level changes, causing an upward slope in SRAS.
Step-by-step explanation:
The short-run aggregate supply curve (SRAS) slopes upward and to the right because of a positive relationship between the price level and the quantity of real GDP supplied in the short run. When the price level for outputs increases, and the price of inputs remains fixed, firms have an incentive to increase production to earn higher profits. This explains why the SRAS curve is upward-sloping: it captures the temporary period during which wages and other resource prices have not yet adjusted to changes in the price level. The correct answer to the question is D) wages and other resource prices adjust only slowly to changes in the price level.