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If all prices are stuck at a predetermined level, then when a short-run aggregate supply curve is drawn with real GDP (Y) along the horizontal axis and the price level (P) along the vertical axis, this curve: A. is horizontal. B. is vertical. C. slopes upward and to the right. D. slopes downward and to the right.

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cancinodavidq

Answer:

A. is horizontal

Explanation:

If the prices are fixed, for different level of GDP productions, the price is the same. In the atttached image you could observe this situation considering two different levels of output with the same price in the short run. This is consistent with the price stickness in the short run.

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