Question

According to the aggregate supply curve, an increase in current output causes: _______

1) an upwards shift of the aggregate supply curve.
2) a change in the expected price level this year.
3) an increase in the labour force.
4) an increase in the current price level.
5) a downwards shift of the aggregate supply curve.

Answer 1

According to the aggregate supply curve, an increase in current output causes an upwards shift of the aggregate supply curve.

Step-by-step explanation:

The correct answer is option 1) an upwards shift of the aggregate supply curve.

According to the aggregate supply curve, an increase in current output will result in an upwards shift of the aggregate supply curve.

This is because when firms see higher output and demand for their products, they will expand production in order to meet the increased demand.

By increasing production, firms can take advantage of the higher prices for their goods and services, which leads to higher profits.

This shift in the aggregate supply curve represents the positive relationship between output and the price level.