Which of the following events will increase long- run aggregate supply?
A) a decrease in expected profit
B) an increase in the interest rate
C) an advance in technology
D) an increase in resource prices

Question

Quizplus · Accepted Answer

An advance in technology will increase productivity and efficiency, leading to an increase in long-run aggregate supply. A decrease in expected profit (A) would likely decrease supply in the short run, but not necessarily in the long run. An increase in the interest rate (B) may affect investment in the short run, but not necessarily in the long run. An increase in resource prices (D) will decrease the profitability of producing goods and services, leading to a decrease in aggregate supply.

Which of the Following Events Will Increase Long- Run Aggregate