In which of the following situations would the long-run aggregate supply curve shift right?
A)if technology improves
B)if the price level decreases
C)if the price of oil increases
D)if the money supply increases

Question

Quizplus · Accepted Answer

An improvement in technology would lead to increases in productivity and efficiency in the economy, which would reduce costs for businesses and ultimately shift the long-run aggregate supply curve to the right. The other choices would have the opposite effect on the long-run aggregate supply curve - a decrease in price level would shift the short-run aggregate supply curve left but have no effect on the long-run aggregate supply curve, an increase in the price of oil would increase production costs causing a leftward shift in both the short-run and long-run aggregate supply curves, and an increase in the money supply would lead to short-run increases in output and price level as firms and consumers spend more, but ultimately shift the long-run aggregate supply curve back to its original position.

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