A rightward shift of the long-run aggregate supply curve means there has been
A) a decrease in the cyclical unemployment rate.
B) an increase in the cyclical unemployment rate.
C) an increase in the price level.
D) a decrease in the price level.
E) economic growth.

Question

Quizplus · Accepted Answer

A rightward shift of the long-run aggregate supply curve indicates an increase in potential output, which is usually caused by factors such as technological advancement, improved infrastructure, or an increase in the labor force. This leads to economic growth, as the economy is now capable of producing more goods and services than before without causing inflation or a decrease in the price level. Therefore, the correct answer is E, economic growth.

A Rightward Shift of the Long-Run Aggregate Supply Curve Means