The long-run aggregate supply curve shifts right if
A)technology improves.
B)the price level decreases.
C)the money supply increases.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

An improvement in technology can increase the productive capacity of an economy, which would shift the long-run aggregate supply (LRAS) curve to the right. Decrease in price level shifts the short-run aggregate supply (SRAS) curve and not the LRAS curve. Increase in money supply can shift the SRAS curve in the short-run but not the LRAS curve in the long-run. Therefore, option A is the correct answer.

The Long-Run Aggregate Supply Curve Shifts Right If