According to the aggregate demand/aggregate supply curve, when prices rise, busi

Question

According to the aggregate demand/aggregate supply curve, when prices rise, businesses will cut back spending. businesses will increase spending by the amount of the price increase. businesses will increase spending by an amount less than the price increase. business spending is unaffected. According to the aggregate demand/aggregate supply curve, when prices rise, businesses will cut back spending. businesses will increase spending by the amount of the price increase. businesses will increase spending by an amount less than the price increase. business spending is unaffected.

Explanation / Answer

businesses will increase spending by an amount less than the price increase.

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