When the quantity of capital increases, then the
A) LAS curve shifts rightward and the SAS curve does not shift.
B) SAS curve shifts rightward and the LAS curve does not shift.
C) SAS curve shifts rightward and the LAS curve shifts rightward.
D) SAS curve shifts rightward and the LAS curve does shifts leftward.

Question

Quizplus · Accepted Answer

An increase in the quantity of capital increases the potential output of an economy, shifting both the Long-Run Aggregate Supply (LAS) and Short-Run Aggregate Supply (SAS) curves to the right.

When the Quantity of Capital Increases, Then the