Refer to the figure given below. In the above figure, AD₁ and AS₁ represent the original aggregate demand and aggregate supply curves, respectively.AD₂ and AS₂ show the new aggregate demand and aggregate supply curves.The change in aggregate supply from AS₁ to AS₂ could be caused by: A)a reduction in the price level. B)an increased availability of entrepreneurial talent. C)an increase in business taxes. D)the real-balances effect, interest-rate effect, and foreign-trade effect.

Question

Quizplus · Accepted Answer

An increased availability of entrepreneurial talent can shift the aggregate supply curve to the right, as it would lead to an increase in the quantity of goods and services produced at every price level.

Refer to the Figure Given Below