Real GDP will increase over the long run if
A) prices continually go up.
B) the long-run aggregate supply curve shifts continually to the right.
C) the long-run aggregate supply curve shifts continually to the left.
D) the long-run aggregate demand curve shifts continually to the left.

Question

Quizplus · Accepted Answer

Real GDP will increase over the long run if the long-run aggregate supply curve shifts continually to the right, indicating an increase in the economy's potential output due to factors such as technological advancements, population growth, and capital accumulation. Option A is incorrect because prices going up without a corresponding increase in output will lead to inflation rather than real GDP growth. Option C and D are incorrect because a shift in the long-run aggregate supply curve to the left or a shift in the long-run aggregate demand curve to the left will lead to a decrease in real GDP in the long run.

Real GDP Will Increase Over the Long Run If