Which of the following will NOT lead to a rightward shift of the long-run aggregate supply curve?
A) increase in labor productivity
B) increase in aggregate spending
C) increase in capital
D) increase in labor

Question

Quizplus · Accepted Answer

An increase in aggregate spending will lead to a movement along the short-run aggregate supply curve due to the immediate impact on prices, but it will not cause a long-term shift in the LRAS curve. Increases in labor productivity (D), capital (C), and labor (D) will all lead to long-term increases in potential output, shifting the LRAS curve to the right.

Which of the Following Will NOT Lead to a Rightward