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The Positive Relationship Between the Short-Run Aggregate Supply Function and the Price

Question 4

Multiple Choice

The positive relationship between the short-run aggregate supply function and the price level suggests that,in the short run,


A) firms produce more output as the price level falls.
B) firms produce more output as the price levels rises.
C) wages increase along the aggregate supply function.
D) lower price levels are more profitable for the firm.

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