Over time in a growing economy, the long- run aggregate supply curve will
A) shift rightward.
B) become horizontal at the long- run potential price level.
C) become increasingly steep.
D) shift leftward.

Question

Quizplus · Accepted Answer

Over time in a growing economy, the long-run aggregate supply curve will shift rightward as the economy experiences technological progress, increases in capital stock, and improvements in the quality and quantity of labor supply. This allows the economy to produce more output at each price level, resulting in a shift of the long-run aggregate supply curve to the right.

Over Time in a Growing Economy, the Long- Run Aggregate