Over time in a growing economy, the long-run aggregate supply curve will
A) become horizontal at the long-run potential price level.
B) shift rightward.
C) shift leftward.
D) become increasingly steep.

Question

Quizplus · Accepted Answer

In a growing economy, the long-run aggregate supply (LRAS) curve shifts rightward due to increases in capital, labor, and technological advancements, indicating a higher potential output level over time.

Over Time in a Growing Economy, the Long-Run Aggregate Supply