Increases in potential output shift:
A)The long-run aggregate supply curve
B)The short-run aggregate supply curve
C)Both the long-run aggregate supply curve and the short-run aggregate supply curve
D)The long-run aggregate supply curve, the short-run aggregate supply curve, and the dynamic aggregate demand curve

Question

Quizplus · Accepted Answer

Increases in potential output shift both the long-run aggregate supply curve and the short-run aggregate supply curve because they represent the maximum output that the economy can produce at any given time.

Increases in Potential Output Shift