The long-run aggregate supply curve shifts right at the same time as
A)the Laffer curve shifts upward.
B)the production possibilities curve shifts outward.
C)the production possibilities curve shifts inward.
D)the inflation rate increases.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve shifts right when there is an increase in the production possibilities curve, indicating an increase in potential output. This can be due to technological advancements, an increase in the quantity or quality of labor, or an increase in the quantity or quality of capital. The Laffer curve relates to the relationship between tax rates and government revenue, and the inflation rate is not directly related to the shift in the long-run aggregate supply curve.

The Long-Run Aggregate Supply Curve Shifts Right at the Same