Technological progress will
A) shift the LAS curve rightward but will not shift the SAS curve.
B) not shift either the LAS or the SAS curve.
C) shift both the LAS and SAS curves rightward.
D) shift the SAS curve rightward but will not shift the LAS curve.

Question

Quizplus · Accepted Answer

Technological progress increases the productive capacity of an economy, which shifts both the Long-Run Aggregate Supply (LAS) curve and the Short-Run Aggregate Supply (SAS) curve rightward. The LAS curve shifts because technological advancements increase potential output, and the SAS curve shifts because in the short run, firms can produce more with the same amount of inputs.

Technological Progress Will