The figure below shows the aggregate demand and supply curves for the U.S.A rightward shift of the aggregate supply curve from AS to AS' would be caused by:
Figure 5.4

A)an increase in resource prices,improved technology,or an extension of patent protection.
B)a decrease in resource prices,improved technology,or an extension of patent protection.
C)a decrease in resource prices,improved technology,or a shortening of patent protection.
D)an appreciation of the dollar,higher inflation in Europe,or a decrease in resource prices.
E)a depreciation of the dollar,higher inflation in Asia,or improved technology.

Question

The figure below shows the aggregate demand and supply curves for the U.S.A rightward shift of the aggregate supply curve from AS to AS' would be caused by:​ ​
Figure 5.4
​

A)an increase in resource prices,improved technology,or an extension of patent protection. 
B)a decrease in resource prices,improved technology,or an extension of patent protection. 
C)a decrease in resource prices,improved technology,or a shortening of patent protection. 
D)an appreciation of the dollar,higher inflation in Europe,or a decrease in resource prices. 
E)a depreciation of the dollar,higher inflation in Asia,or improved technology.

Quizplus · Accepted Answer

A rightward shift of the aggregate supply curve indicates an increase in the quantity of goods and services supplied at every price level. This could be caused by a decrease in resource prices, which would reduce production costs and enable producers to supply more goods and services at every price level. Improved technology would also allow producers to be more efficient and productive, leading to an increase in the quantity of output supplied. Finally, an extension of patent protection would encourage innovation and investment, leading to an increase in the quantity of output supplied. Therefore, option B, which includes all of these factors as possible causes of the rightward shift of the AS curve, is the best choice.

The Figure Below Shows the Aggregate Demand and Supply Curves