-If potential GDP increases,then,in the figure above,the potential GDP line ________,and the aggregate supply curve ________.
A)shifts rightward;shifts leftward
B)shifts rightward;shifts rightward
C)does not shift;shifts rightward
D)does not shift;does not shift
E)shifts rightward;does not shift

Question

-If potential GDP increases,then,in the figure above,the potential GDP line ________,and the aggregate supply curve ________.
A)shifts rightward;shifts leftward 
B)shifts rightward;shifts rightward 
C)does not shift;shifts rightward 
D)does not shift;does not shift 
E)shifts rightward;does not shift

Quizplus · Accepted Answer

When potential GDP increases, it indicates an increase in the economy's capacity to produce goods and services, which shifts both the potential GDP line and the aggregate supply curve to the right.

-If Potential GDP Increases,then,in the Figure Above,the Potential GDP Line