In which of the following situations would the long-run aggregate supply curve shift right?
A)if immigration from abroad decreases
B)if the capital stock decreases
C)if the money supply increases
D)if technology advances

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve represents the relationship between output and the price level in the long term when all inputs are variable. Technological advances shift the long-run aggregate supply curve to the right as it increases productivity, efficiency and thus output. A decrease in immigration from abroad or the capital stock would shift the curve leftward, reducing output. An increase in the money supply would mainly affect the short-run aggregate supply, causing inflationary pressures in the long-term without changing the potential output.

In Which of the Following Situations Would the Long-Run Aggregate