Multiple Choice Question

Which of the following accurately describes the immediate-short-run aggregate supply curve?
Multiple choice question.

A downward sloping curve

An upward sloping curve

A diagonal line

A horizontal line

1 answer

The immediate-short-run aggregate supply curve is best described as:

A horizontal line

This is because, in the immediate short run, production levels are fixed, and firms will supply whatever quantity is demanded at prevailing prices, leading to a horizontal supply curve at that price level.