Suppose there is an increase in the quantity of capital. As a result, the SAS
A)and the LAS curves both shift leftward.
B)and the LAS curves both shift rightward.
C)curve does not shift but the LAS curve shifts rightward.
D)curve does not shift but the LAS curve shifts leftward.
E)curve shifts rightward, but the LAS curve does not shift.

Question

Quizplus · Accepted Answer

An increase in the quantity of capital increases the productive capacity of the economy, shifting both the Short-Run Aggregate Supply (SAS) and Long-Run Aggregate Supply (LAS) curves to the right.

Suppose There Is an Increase in the Quantity of Capital