Which one of the following will increase aggregate supply, thereby shifting the curve right?
A) Nominal wages increase as a result of a decreased labor supply.
B) The productivity of workers increases as a result of technological improvements.
C) A new government policy increases business taxes.
D) The price of oil, which is a major input into most production activities, increases.

Question

Quizplus · Accepted Answer

An increase in worker productivity due to technological improvements makes it possible for firms to produce more goods and services at every price level, thus shifting the aggregate supply curve to the right.

Which One of the Following Will Increase Aggregate Supply, Thereby