Changes in the quantity used of existing inputs affect aggregate quantity supplied, while changes in the quality of inputs affect both long-run and short-run aggregate supply.

Question

Quizplus · Accepted Answer

Changes in the quantity used of existing inputs, such as hiring more workers or increasing the amount of raw materials used, will directly affect the level of aggregate quantity supplied in the short run. However, changes in the quality of inputs, such as improving worker skills or using higher quality materials, can lead to increases in productivity and efficiency in the long run, affecting both long-run and short-run aggregate supply.

Changes in the Quantity Used of Existing Inputs Affect Aggregate