Which one, if any, of the following events shift the short-run aggregate supply curve but not the long-run aggregate supply curve?
A)a change in factor prices
B)a change in the quantity of capital
C)an advance in technology
D)an increase in the full-employment quantity of labour
E)none of the above

Question

Quizplus · Accepted Answer

A change in factor prices, such as an increase in the price of oil or labour, would affect the short-run aggregate supply curve but not the long-run aggregate supply curve since firms can adjust their production levels in the long run by changing the quantity of capital they use. The other options listed - a change in the quantity of capital, an advance in technology, and an increase in the full-employment quantity of labour - would all shift the long-run aggregate supply curve as well as the short-run aggregate supply curve.

Which One, If Any, of the Following Events Shift the Short-Run