Increases in the capital stock:
A)Shift the short run aggregate supply curve upward.
B)Shift the long run aggregate supply curve to the right.
C)Shift short run aggregate supply curves upward and long run aggregate supply curves to the right.
D)Do none of the above

Question

Increases in the capital stock:
A)​Shift the short run aggregate supply curve upward.
B)​Shift the long run aggregate supply curve to the right.
C)​Shift short run aggregate supply curves upward and long run aggregate supply curves to the right.
D)​Do none of the above

Quizplus · Accepted Answer

Increases in the capital stock shift the long run aggregate supply curve to the right as it leads to an increase in productivity and potential output in the economy. It does not necessarily impact the short run aggregate supply curve as it depends on other factors such as the current utilization of resources and technology.

Increases in the Capital Stock