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B) the sum of wages, salaries, corporate profits, rents and interest. C) only the 18) When the price level rises, the long-run aggregate supply curve ______. C) It does not shift in response to temporary changes in aggregate demand. 34) In the short run, firms expand their production when the price level rises because. Money and the Rate of Interest (the LM Curve) the relations among saving, investment, government spending, and real interest rates; and the connections In turn, this increase in aggregate demand leads firms to produce more as in a Keynesian model As the LM shifts back, the interest rate will tend to rise from r'' to r'''.