Which statement about aggregate supply is true?

• A. It is influenced by government policy
• B. It is the total demand by consumers
• C. It is the total supply firms plan to sell during a period
• D. It is unrelated to resources

Answer: (C)

Aggregate supply is the total quantity of goods and services that firms in the economy plan to produce and offer for sale in a given period at a given price level. This reflects firms’ capacity and willingness to produce, which depends on available resources, technology, and costs. Among the statements, the one that best captures this idea is that aggregate supply is the total supply firms plan to sell during a period. That distinguishes it from aggregate demand, which is about overall spending. The idea that it’s unrelated to resources isn’t correct, since resource availability and costs directly affect how much firms can and will produce. Government policy can influence supply by affecting costs or incentives, but it doesn’t define what aggregate supply is.