Which of the following would shift the LRAS curve to the left?
A)an increase in the average workweek
B)an improvement in technology
C)a civil war
D)a decrease in aggregate demand
E)accelerated depreciation allowances to encourage capital formation

Question

Quizplus · Accepted Answer

A civil war would likely result in destruction of capital, loss of human life and displacement of people, leading to a decrease in productivity and a shift of the LRAS curve to the left. The other options would either shift the LRAS curve to the right (B, E) or affect the short-run aggregate supply (A, D) but not necessarily the long-run aggregate supply.

Which of the Following Would Shift the LRAS Curve to the Left