If potential GDP increases,then the
A)aggregate supply curve shifts rightward.
B)real wage rate increases.
C)real wage rate falls.
D)aggregate demand curve shifts rightward.
E)aggregate supply curve shifts leftward.

Question

Quizplus · Accepted Answer

If potential GDP increases, it means that the economy's capacity to produce goods and services has increased. This would shift the aggregate supply curve rightward because there is a greater potential for output at every price level.

If Potential GDP Increases,then the