For the following question(s),assume that the economy is in long-run equilibrium in the aggregate demand/aggregate supply model and that some sort of event takes place.In each case,mark the most likely impact of the event on the aggregate demand/aggregate supply diagram given below.
Figure 10-19

-Refer to Figure 10-19.A major technological advance occurs.
A)The aggregate demand curve would shift to the right.
B)The aggregate demand curve would shift to the left.
C)Both the short-run and the long-run aggregate supply curves would shift to the right.
D)Both the short-run and the long-run aggregate supply curves would shift to the left.

Question

For the following question(s),assume that the economy is in long-run equilibrium in the aggregate demand/aggregate supply model and that some sort of event takes place.In each case,mark the most likely impact of the event on the aggregate demand/aggregate supply diagram given below.
Figure 10-19
 
-Refer to Figure 10-19.A major technological advance occurs.
A)The aggregate demand curve would shift to the right. 
B)The aggregate demand curve would shift to the left. 
C)Both the short-run and the long-run aggregate supply curves would shift to the right. 
D)Both the short-run and the long-run aggregate supply curves would shift to the left.

Quizplus · Accepted Answer

A technological advance will increase productivity and output, causing both the short-run and the long-run aggregate supply curves to shift to the right. However, there is no reason to assume that the event would affect consumer spending or investment, so the aggregate demand curve would not shift.

For the Following Question(s),assume That the Economy Is in Long-Run